ORAL ANSWERS TO QUESTIONS

WORK AND PENSIONS

The Secretary of State was asked—

Housing Benefit

Mary Glindon: What his plans are for the future of housing benefit for people under 25 years old.

Meg Hillier: What his plans are for the future of housing benefit for people under 25 years old.

Iain Duncan Smith: In June, the Prime Minister instigated a debate about the merits and risks of taxpayers continuing to meet the £2 billion bill that automatic entitlement to housing benefit for people aged under age 25 brings. More work is required, and that discussion and debate is still going on.

Mary Glindon: Last year, 10,000 young people became homeless because, through no fault of their own, they could no longer live with their parents. Will the Secretary of State give the House a categorical assurance that there will be no further plans in this Parliament to take away young people’s housing benefit?

Iain Duncan Smith: I repeat what I said in my first answer: there is a discussion and debate. The policy debates are likely to go ahead, but I have no plans as yet to implement any policy—there are further discussions to be had.

Meg Hillier: When the Secretary of State is having those further discussions, perhaps he will take account of experience in my constituency, where around a third of residents are under 24. Nationally, an estimated 400,000 households are headed by someone under 25 who claims housing benefit, half of whom have dependent children. When he is having those discussions, will he consider the impact on children of his policy proposal?

Iain Duncan Smith: That would go without saying—all impacts on various groups will be taken into consideration. The main point I would make is that, no matter what else, if we were to implement such a policy, we would have to take into consideration categories of people who might find it incredibly difficult, such as those described by the hon. Lady. There would not necessarily be carte blanche—there would be nuances and changes. However, as I have said, discussions are ongoing, and as she can see, no policy exists at the moment.

Andrew Bridgen: Does my right hon. Friend share my concern that less than 16% of the 204,300 young people under 25 with children who claimed housing benefit are in a couple?

Iain Duncan Smith: That is obviously a matter for concern, but also for wider change. We want to ensure that couples stay together, and our plans and changes with universal credit will help with that enormously. It is worth reminding ourselves of the situation left by the previous Government. Labour Members go on about our policy, but in the past decade the housing benefit bill doubled from £11 billion to £21 billion. We are reducing
	the overall rise, but housing benefit under this Government will still rise by around £2 billion, as opposed to the huge sum the previous Government would have instigated.

Hywel Williams: What would the Secretary of State say to the GISDA organisation in my constituency, which works with homeless and vulnerable people in marginal and rural areas uniquely through the medium of Welsh? It depends on housing benefit to move those young people into housing, employment and training.

Iain Duncan Smith: Up until now, many people have been trapped on benefits, as they will continue to be without change. The point has been made in this discussion and debate that many who are not on housing benefit but on low incomes find that they must make difficult decisions on where to live—on whether to stay at home or share. My point is simply that we are looking at how we bring those who fall under the benefit bill into line with others, thus giving them a greater opportunity to take work and profit by doing well from an early age. That is all the debate is about. It should surely be welcomed as a right debate to hold.

Ian Austin: It is interesting that, despite the Liberal Democrat campaign, the Secretary of State is not ruling the proposal out. Young people have been coming to London to get on in life since Dick Whittington. What does the Secretary of State say to the youngster who took the advice of his predecessor, Lord Tebbit, and got on his bike, moved to London, worked hard and paid taxes, but was made redundant? Should he lose his home and have to move hundreds of miles to live with his parents, where there might not be any jobs? All hon. Members want housing benefit to come down, but how would that promote aspiration?

Iain Duncan Smith: This Government are doing more to help unemployed young people back to work than was ever done by the previous one. I remind him that his Government left us with rising youth unemployment. They took all those who were unemployed for over 10 months and put them on a course. When those who were unemployed came off the course, they went back to zero, and therefore were never registered. We have a better record than they had.

Universal Credit

Stephen Mosley: What steps he is taking to prevent fraudulent universal credit claims.

Iain Duncan Smith: We are investing £400 million in the next four years to reduce fraud and error as part of a joint operation with Her Majesty’s Revenue and Customs and the Cabinet Office. We are already making progress, and universal credit will enable even greater strides to be made. At the autumn statement, the inclusion of universal credit in the baseline—a critical moment—means we now anticipate savings from fraud, error and overpayments to be roughly £2.2 billion per year.

Stephen Mosley: I welcome my right hon. Friend’s response. Any money defrauded from the taxpayer is money taken from those who are most in need. Does
	he agree that universal credit is one way in which the Government are cracking down on those who are abusing the system?

Iain Duncan Smith: That is absolutely true. We were left with a series of benefits that too often were riddled with fraud and error. Not all of this is about fraud. Many people are receiving overpayments or underpayments when they should be receiving the correct amount. Too often with tax credits, people are chased at the end of the year, without their realising that they had received the wrong money in the first place. Universal credit will be kinder in the sense that it will be adjusted each month. It will help us save huge sums—some studies state £2.2 billion per year.

Anne Begg: The Government’s decision to go digital by default—in other words, people will be able to receive universal credit only if they apply online—surely creates a greater chance of fraudulent activity. We all remember what happened with the online form for child tax credits. What guarantees do the Government have that universal credit will not be susceptible to online fraud and that the necessary checks will not take such a long time that they will delay payment? All of a family’s income will come through universal credit.

Iain Duncan Smith: We have taken account of that. I have had the opportunity to discuss this with the hon. Lady, and I am sure I will again. The reality is that digital by default does not mean that that is the end of it for people who are not online. On the contrary, we allow for those who are not online. We will help and support them as they make their claim, and it will be taken through the system. They will receive their money on time. For those in doubt, we will make payments anyway. We fully recognise the reality of the need for money and for it be sorted out afterwards—that has been taken into account.

Workplace Pensions

Paul Uppal: What steps he is taking to increase take-up of workplace pensions.

Steve Webb: Automatic enrolment was introduced in October and the number of workers saving into a pension in some of Britain’s largest companies has already increased. In steady state, we expect 6 million to 9 million people to be newly saving, or saving more. To support this, we are running a national communications campaign, including TV adverts targeting those least likely to be saving in a pension.

Paul Uppal: It is becoming increasingly apparent that we on the Government Benches are on the side of those who strive and work hard in society. In that vein, how can my constituents in Wolverhampton South West who are saving for the future have access to enrolment to high-quality pension funds?

Steve Webb: Through the creation of the National Employment Savings Trust we have ensured that there is a benchmark of low-cost, high-quality pension provision,
	which is driving down costs across the market. We need to go further and we are looking at whether the role of NEST can be expanded. We are also driving through transparency on charges, so that firms and employees can see what they are paying for and can pay less over time.

Frank Field: Would not one good test of who is on the side of the shirkers or the strivers be a state pension that guaranteed that people were taken off the means test, so it would be safe to save through companies? Will the pensions Minister give us a date for when we will see the White Paper?

Steve Webb: The right hon. Gentleman will have heard the Chancellor only last Thursday reaffirm our commitment to state pension reform, and to do exactly that—to ensure that people who work hard and save hard are clear of means testing. The White Paper is at an advanced stage.

Graham Stuart: Will the Minister reassure the House that the Government will not repeat the measures introduced in 1997 by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), which undermined the basis of work-based pensions? Does the Minister understand why the right hon. Gentleman is so often absent, which is doubtless due to his embarrassment about that assault on security?

Steve Webb: My hon. Friend is right. That was one of several measures that took money out of final salary pension schemes, which, given they were the highest-quality schemes available, was no way to show commitment to quality pension provision.

Gregg McClymont: I would have thought that Conservatives had more respect for the office of Prime Minister, Mr Speaker.
	Do the Government have plans to make the rising state pension age fairer for those who have worked in manual occupations their whole life and who will tend not to have the same life expectancy? How do the Government plan to make the state pension age fair across all occupations?

Steve Webb: I am interested in that point—it is one that the hon. Gentleman’s late right hon. Friend, Malcolm Wicks, used to raise regularly—and we are always interested in looking at ideas on it. Our proposal is that the state pension age would be more automatically linked to the general improvement in longevity that has applied across the social scale. He is right that there remain significant differences, but a rising tide—as it were—is lifting all boats.

Housing Benefit

Peter Hain: What assessment he has made of the effect of changes to housing benefit rules on married disabled people living in specially adapted two-bedroom properties.

Esther McVey: When developing the social sector size criteria policy, we considered the impacts
	on disabled people, as set out in our impact assessment. We have added a further £30 million a year to the discretionary housing payments fund from 2013-14 aimed specifically at those in adapted accommodation and foster carers.

Peter Hain: Why will the Government not withdraw the housing benefit changes, which are having a devastating impact on disabled people, including my constituents, Mr and Mrs Harris of Seven Sisters, Neath, about whom I have written to the Secretary of State? They live in an adapted property. Mrs Harris cannot sleep at night, Mr Harris is a full-time carer for her and they need two bedrooms, but the draconian and oppressive changes the Government are implementing mean that there is funding for only one bedroom. There is a shortage of one-bedroom properties in Neath and they cannot afford the extra rent. It is time the Government withdrew these policies. Do they not understand that the changes will have a massive impact on the most vulnerable people in our society? The Secretary of State started off with the seemingly sincere motive of tackling poverty, but he has ended up by punitively and callously hitting the most vulnerable.

Esther McVey: That is not the case. An impact assessment has been done and £30 million of discretionary funds have been put in place for exactly the people the right hon. Gentleman is talking about. We have to do this in the round. There are a million spare rooms in the country and millions of people on waiting lists and in overcrowded homes, and we have to find properties for them, too. The case that he mentions, however, is precisely the sort the discretionary fund will be for.

Tony Baldry: As co-chair of the all-party group on carers, my understanding is that, where a person requires a full-time carer, local authorities may provide housing benefit for them to have a two-bedroom property. Have I misunderstood the situation, or have I understood it correctly?

Esther McVey: My hon. Friend has understood correctly and explained it perfectly.

Natascha Engel: What will be the total estimated cost of moving people into smaller homes as a result of the bedroom tax, and how does that compare with the total estimated saving to be made?

Esther McVey: There are major savings to be made and continual assessments will be done, but, as I said, in the round we have to find accommodation for other people and people have to understand the cost of the accommodation that fits their need.

Nick Harvey: Is my hon. Friend aware of the anxiety felt by those who have received notification that they might be affected by these changes? Will she guarantee help not only for those we have heard about, whose homes have been adapted, but for those with noisy respiratory equipment, for example, with whom it would be unreasonable to expect others to share a bedroom at night? How long will this fund last, and is she confident it will cover all those cases?

Esther McVey: Yes, I am confident it will. Guidance will go to local authorities on how to use the discretionary housing payments and all factors will be taken into account, including those concerning my hon. Friend’s constituents.

Anne McGuire: Disabled people across the country currently have to cope with a torrent of piecemeal welfare reform changes that will impact on their lives. Disability Rights UK, the Joint Committee on Human Rights, the Equality and Human Rights Commission, the Royal National Institute of Blind People, Mind, Scope, Leonard Cheshire Disability and Carers UK, among others, including tens of thousand of people who have signed Pat’s petition, have asked the Minister to conduct a cumulative impact assessment. If she is confident she is doing the best for disabled people, why does she not listen to them and conduct a cumulative impact assessment? Why does she stubbornly refuse to do one?

Esther McVey: I am afraid that the right hon. Lady never did one when Labour was in government. Disabled people remain my top priority. Let me reiterate to the House that the disability living allowance, carer’s allowance and the support group of the employment and support allowance will all increase with CPI. We have protected the disability support programme in its entirety, and an extra £15 million is going into Access to Work.

Enterprise Allowance

Julian Smith: What plans he has to increase access to the new enterprise allowance.

Mark Hoban: We have recently taken steps to increase access to the new enterprise allowance by extending eligibility to day one of an individual’s jobseeker’s allowance claim and increasing the number of mentoring places available by 30,000.

Julian Smith: Take-up of the scheme in Yorkshire has been excellent, but how do we ensure that those considering taking it up are given the best possible advice on developing their nascent business ideas?

Mark Hoban: My hon. Friend is right to highlight take-up in Yorkshire. In his constituency, 40 claimants have started with a mentor, and so far 30 have started training. That is a good result—better than the national average—so clearly people in his constituency are getting good advice. We need to ensure that the quality of advice increases. We want more people to see self-employment as a way into the work force.

Bill Esterson: The Minister is right that more people should go self-employed; the problem with the way the system has been set up is that it assumes people earn the minimum wage for every hour worked, when that is far from the truth, as he will know. Will he assure me that he will make changes where they are needed to ensure that self-employed people can take advantage of the scheme and not be disadvantaged, which is a potential problem at the moment?

Mark Hoban: The new enterprise allowance is there to help people to make the transition from unemployment into self-employment. It is absolutely right to give them the support they need not just to earn the minimum wage but to go beyond that. We have seen some good examples of people taking up the new enterprise allowance who have started their own businesses and are now employing others.

Andrew Percy: I join my hon. Friend the Member for Skipton and Ripon (Julian Smith) in saying that take-up in Yorkshire has been excellent. Indeed, in my constituency there has been demand to access the scheme earlier, but one issue needs to be addressed. In many areas there is a lot of other potential support for businesses, but jobcentre staff are not necessarily aware of it. Can we ensure that the advice given is as tailored as possible, taking into account the various funding streams available locally?

Mark Hoban: My hon. Friend is absolutely right. The advice given is not given by Jobcentre Plus staff: we get private and public sector contractors in to give that support. We need to ensure that people setting up their businesses are signposted to other sources of advice and funding to give them the best possible start in getting their businesses off the ground.

Work Programme

Jonathan Ashworth: What assessment he has made of the effectiveness of the Work programme in reducing long-term youth unemployment in (a) Leicester and (b) the UK.

Mark Hoban: Nationally, more than 57,000 young people on the Work programme have found work and just under 10,000 have been in work for six months. Of those, about 80 are in Leicester.

Jonathan Ashworth: Unemployment and youth unemployment are higher in Leicester South than they were at the general election. The latest statistics show that about 3% of people have found work as a result of the Work programme. Many employers who took advantage of the future jobs fund tell me that they are shunning the Youth Contract or that they are sceptical about the Work programme. Given that the Minister’s own Department has said that the future jobs fund was of benefit to society, employers and those on it, does he now regret abolishing it?

Mark Hoban: The evidence from the future jobs fund demonstrated that the taxpayer was never going to recover the money that was spent on it and that it was 20 times more expensive than the work experience scheme, which is similar to it and from which we are getting good outcomes. Taking into account Labour’s fiddled figures, youth unemployment is lower today than it was in May 2010.

Stephen Timms: In the invitation to tender for the Work programme, the Minister’s Department said that if there was no programme at all 5% of people would secure job outcomes within 12 months. We now
	know that, under the programme, the figure was 2%. For people on employment and support allowance, it was 1%. Of the 9,500 people on employment and support allowance who used to be on incapacity benefit and who were referred to the Work programme in its first 14 months, only 30 secured job outcomes. The Minister told
	The Daily Telegraph
	that Work programme providers needed to “get their act together”. Why does he think that they are to blame?

Mark Hoban: The Work programme providers are responsible, and they are paid to get people into work. This is a much better value programme than its predecessors, but we need to get providers to raise their game. The figures released at the end of last month showed that job outcomes were rising and that the longer the programme had been functioning, the more people were getting into work. This is a good start, and it is a much more effective programme than the schemes introduced by the previous Labour Government.

Philip Hollobone: How many people have come off benefits after joining the Work programme in (a) Kettering constituency, (b) Northamptonshire and (c) England to date.

David Amess: How many people have come off benefits after joining the Work programme to date.

Mark Hoban: Last month, we published data showing that 57% of claimants who joined the Work programme in June 2011 had spent some time off benefits. The figures showed that the programme was moving people off benefits and that, as claimants spent longer on the programme, more of them came off benefits.

Philip Hollobone: I recently visited A4e, which is helping to provide the Work programme in Kettering, and I was impressed by its commitment to getting unemployed people back into work. Is the Minister aware, however, that the two biggest barriers to finding permanent employment in my constituency are travel costs and child care difficulties? What can Her Majesty’s Government do to solve those two problems?

Mark Hoban: There is a range of ways of helping people with their travel costs in order to get them back into work. Jobcentre Plus can provide money through the flexible support funds, and Work programme providers can provide support to help people to reduce the cost of their travel. There is also funding available to help people who want to work to get free child care.

David Amess: Will my hon. Friend confirm that figures just released by the Employment Related Services Association show that the Work programme has been even more successful in taking people off benefits than the figures released by his own Department suggest?

Mark Hoban: My hon. Friend is absolutely right. The figures produced by the ERSA last month show that more than 200,000 people have found work through the Work programme. They also show that the programme
	is effective at moving people into work and that job entries are rising from month to month. They clearly show improvements in performance as the programme matures.

Kate Green: The DWP’s own evaluation has shown that the Work programme is proving less successful at getting women than men into work, that it is particularly poor at getting lone parents into work, and that the black box approach is failing to deliver substantive personalised support. What is the Minister going to do to ensure that the Work programme genuinely meets the needs of those furthest from the labour market?

Mark Hoban: The Work programme has been designed to allow providers to use a range of ways to help people back into work. We give them that flexibility. In return, they are paid only when they are successful. That contrasts with the schemes introduced by the previous Government, in which most of the money went in up front and providers were not paid by results. I am sure that the hon. Lady will welcome the fact that, under this Government, there are more women in work than ever before.

Luciana Berger: I listened carefully to the Minister’s response a moment ago about the success of the Work programme. Does he acknowledge, however, that of the almost 9,500 people who were in receipt of employment and support allowance who used to receive incapacity benefit and who were referred to the Work programme in its first 14 months, only 30 received job outcomes? What are the Minister’s plans for making the Work programme work?

Mark Hoban: As I have already made clear in answer to a similar question, the Work programme is improving its performance, and the longer the scheme is in operation the more people are getting into work. That will lead to more job outcome payments in future. We are in the early stages of the scheme, but there is solid evidence to demonstrate that it is getting people off benefits and into work.

Andrew Jones: What steps has the Minister taken to improve the performance of Work programme providers?

Mark Hoban: We have taken a range of actions to improve the performance of Work programme providers. We are working with them to establish best practice, particularly in areas such as helping people on employment and support allowance into work. The Department has also written to a number of providers advising them that we want to see a step change in their performance and asking them to produce performance improvement plans, which we will monitor carefully. Programme providers know that they could lose their contract if their performance does not improve.

Sheila Gilmore: For the last year, the Secretary of State and all his Ministers have said they could not give us any information about what was happening with the Work programme because the data was unverified. Now we are getting a stream of
	unverified data, but does that mean we can now see inside the black box? May we have clear information about what services are given to people when they are referred?

Mark Hoban: The hon. Lady will be aware that the minimum service standards for each provider are published. Last month, we saw data produced on off-benefit flows and on the number of people getting six months’ work. The trade association ERSA—Employment Related Services Association—produced details on the number of job starts. I think that a huge amount of data has been published, and I am surprised that the hon. Lady is complaining about it.

Housing Benefit

David Hanson: What discussions he has had with the Welsh Government on the implications of his proposed changes to housing benefit.

Steve Webb: My noble Friend the Minister for Welfare Reform has met Welsh Ministers on several occasions to discuss welfare reform, including changes to housing benefit, and he maintains regular correspondence with them. In addition, officials from the Welsh Government are represented on a number of working groups relating to welfare reform.

David Hanson: Does the Minister accept that the 40,000 people in Wales who will be hit by the bedroom tax changes to housing benefit are either unemployed and long-term unemployed or, very often, are in work on low incomes? What advice would he as a Liberal Democrat offer? Would he encourage them to seek higher-paid jobs, to give up their homes or to take a massive cut in their income?

Steve Webb: The impact of the social housing under-occupation measure is lower in Wales on average than it is in the rest of the United Kingdom. A range of options is open to those who face a shortfall. As the Minister with responsibility for disabilities, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Wirral West (Esther McVey) said, one of them arises when a set of people living in over-occupied accommodation need to move somewhere larger. Many social landlords are getting to know their tenants and their pattern of need, better juggling the housing stock, which is vital and to the benefit of all our constituents.

Disability Living Allowance

Sharon Hodgson: Whether it is his policy that people with cystic fibrosis should be eligible for disability living allowance.

Esther McVey: Disability living allowance is available to any severely disabled person, including those with cystic fibrosis, who meets the eligibility conditions.

Sharon Hodgson: I was recently contacted by my constituent, Peter Chisholm, whose 18-year-old daughter Kate suffers from severe cystic fibrosis. Such is the severity of her condition that she is currently in hospital receiving physiotherapy and taking 50 tablets a day. Kate has been refused DLA and her appeal has been turned down. Does the Minister think that that is right, and if not will she ensure that Kate gets the support she so badly needs?

Esther McVey: I know that this issue is of great interest to the hon. Lady, sitting as she does on the Children, Schools and Families Select Committee, so I listened with great interest—[Interruption.] Apologies, but I am correct in saying that you have a great interest in this subject. I do not know the specific issues relating to the case that you mention. We will obviously look into it, but I have to say that this constituent of yours would have been assessed under the DLA arrangements—it is for that very reason that we are bringing in the new personal independence payment assessment and criteria.

Mr Speaker: Let me remind the Minister that her answers should be addressed through the Chair. She has just referred to my constituent. I would have been delighted to have had my constituent addressed, but it would not have been appropriate here and now. We will move on.

Universal Credit

Nick de Bois: What evaluation of the implementation of universal credit he plans to undertake.

Iain Duncan Smith: Today we are publishing a high-level framework for evaluating universal credit. A full programme of evaluation is being developed. This will include studies of implementation, covering themes such as claimant, staff and stakeholder experience. This, along with other analysis, will form part of a continuous programme of evaluation on the roll-out of universal credit.

Nick de Bois: Will my right hon. Friend reassure me that he will resist the last Government’s temptation always to launch things with a big-bang announcement, often followed by failure? In this case, will he carefully learn the lessons of the pilots he is launching in April?

Iain Duncan Smith: The process we are engaged in—by the way, I have fully briefed the Opposition Front-Bench team, so there are no secrets here—involves a pathfinder starting in April, and by the beginning of October we will start the national roll-out. The whole idea is to roll it out progressively throughout the UK, making sure that we learn the lessons as we roll it out. Whatever changes need to be made can be made at that point. It seems to me that that is the reasonable and right way to do these things, but I remind my hon. Friend that we are not only below budget, but on time—and it will be completed on time.

Clive Betts: No doubt the Secretary of State will confirm that, following the introduction of universal credit, when people’s incomes
	change they will have to go to the local council to sort out their council tax benefit changes, and to the DWP to sort out their housing benefit changes. Two visits, or two contacts, will be required as a result of one change of income. What progress is the Department making in discussing with councils the need to provide a joined-up service so that, in future, people will need make only one contact when their incomes change?

Iain Duncan Smith: The hon. Gentleman is right to raise that issue. We are currently engaging in discussions with local authorities with the aim of ensuring that people receive a proper and comprehensive service, and I assure the hon. Gentleman that that is exactly what they will receive as and when the time comes to roll out universal credit. The point of universal credit is that all the other benefits, including housing benefit, will be combined in a single payment, which will simplify matters enormously for claimants and recipients; and councils will, through council tax benefit, have the opportunity to provide the best possible service for their tenants.

Work Capability Assessment

Sarah Newton: What assessment he has made of Professor Harrington's third review of the work capability assessment.

Mark Hoban: We welcome Professor Harrington’s invaluable contribution to our efforts continually to improve the fairness and effectiveness of the work capability assessment. We published our response on the day of the publication of his third review. We accepted five recommendations outright, and the sixth in principle.

Sarah Newton: I greatly appreciate the Government’s continuous efforts to get this process right—it is a very difficult process to get right—and it is great news that all Professor Harrington’s recommendation have been adopted. May I ask the Minister to join me in urging Opposition Members to stop scaremongering and frightening disabled people in my constituency who are being deterred from coming forward to claim the benefits to which they are entitled?

Mark Hoban: My hon. Friend has made an important point. There has been a great deal of scaremongering about the work capability assessment, and a great deal of criticism, most of it unfounded. Let me inform the House of two facts. First, decisions about eligibility are made not by Atos but by the Department’s decision makers, and secondly, we have established that in only 0.4% of cases in which tribunals have overturned DWP decisions has Atos been the cause.

Tom Greatrex: I am not sure whether some of those last remarks were aimed at me, but may I ask whether the Minister agrees with Professor Harrington’s comment:
	“The appeals process remains an area of considerable concern”?
	As a number of charities have pointed out, many people who were given zero points in the initial assessment discovered, following appeals, that they had at least 15. How many people have found themselves in that position in the last year?

Mark Hoban: If the hon. Gentleman feels guilty, perhaps he ought to examine his conscience in relation to remarks that he himself has made.
	In his report, Professor Harrington said:
	“All they call for is a scrapping of the WCA but with no suggestion of what might replace it.”
	He added that to
	“recognise that things are beginning to change positively in the best interests of the individual… would be helpful.”
	This process is an important part of the way in which we help people to get back into work, but the scaremongering that we hear undermines people’s confidence in it, to the detriment of those who are trying to claim employment support allowance.

Greg Mulholland: When the last Government placed the contracts with Atos, they omitted to ensure that work assessment centres were fully accessible. In 31 of them there is no ground-floor access for wheelchairs, which is clearly absurd. What is the Department doing to deal with that?

Mark Hoban: My hon. Friend has made an important point. We are working with Atos to ensure that as many centres as possible have ground-floor, accessible medical examination rooms, but when they are not accessible, we will try to make arrangements with claimants to ensure that they have access to suitable locations for their assessments.

Access to Work Scheme (Disabled People)

Paul Maynard: What plans he has to improve the Access to Work scheme for disabled people.

Esther McVey: We are undertaking a radical review of Access to Work so that it can help more disabled people into mainstream employment. We are implementing several improvements, including a fast-track assessment process and the removal of cost-sharing for small employers, as well as working with an expert panel to consider how the scheme can be further personalised and made to work more effectively for disabled people and their employers.

Paul Maynard: I welcome the Government’s continued commitment to the Access to Work scheme. May I draw the Minister’s attention to the report of the all-party parliamentary group for young disabled people, which I chair? One of its recommendations was that the scheme should be extended to both internships and long-term voluntary work placements. Will the Minister undertake to consider that recommendation?

Esther McVey: The policy intent of Access to Work is to support disabled people into paid sustainable work, and as such it is not offered for unpaid internships or voluntary work. However, from 1 October this year Access to Work has been available to young disabled people undertaking work experience under the Youth Contract. I would like to meet my hon. Friend to talk further about this matter.

Frank Roy: The Remploy factory in Wishaw was forced to close in the summer, and despite Government promises made from the Dispatch Box, not one single worker—not one—from Remploy in Wishaw has now got a job. Why?

Esther McVey: We are working hard to get everybody from all the Remploy factories into work. When I last talked about this matter in the House, only 35 of those people across the country had got into work, but I am pleased to say that we have now more than quadrupled that number, to 148. We have looked into the personalised support, and we are adapting it every day. We are working on it, and we will make it better.

Benefits Cap

Andrew Gwynne: For what reason people who receive carer’s allowance are not exempt from the benefits cap.

Esther McVey: Although there is no specific exemption from the cap for carers, in practice most carers will be exempt because their partner or child is in receipt of disability living allowance. In addition, there are exemptions for people in work that can also apply to carers. Under universal credit, carers need only work the equivalent of 16 hours a week at the national minimum wage to be exempt.

Andrew Gwynne: I am grateful to the Minister for that response, but it is not quite correct. Close reading of the regulations indicates that a household comprising parents and a disabled adult dependant receiving disability living allowance will not be exempt from the cap, despite the Minister’s promises that they would be. I am sure the Minister appreciates that this is causing great anxiety to those potentially affected. Will she undertake to fix this problem?

Esther McVey: Should there be another adult in the house, that is then a separate household, so both have to be assessed separately. However, I reiterate the fact that those who are exempt from the cap include those on working tax credit, all households with someone who is in receipt of a disability-related benefit, war widows and widowers, and those in receipt of war disablement pensions. A lot of people are therefore exempt.

Karen Buck: Ministers have repeatedly stressed that a household containing anyone in receipt of disability living allowance will not be affected by the benefit cap, but constituents of mine who have an adult disabled child are now being told they will be affected by the cap because the regulations appear to state that if a family has an adult severely disabled person living in the household, that person is not a member of the household. Please will the Minister clarify whether the benefit cap will apply to someone who is looking after a severely disabled adult child?

Esther McVey: I will reiterate what a household is: a household is a basic family unit, and for the purposes of paying out-of-work benefits that will be a single adult or a couple and children, so once another adult is in
	the house, that is a separate household.
	[Interruption.] 
	That has been the definition for a very long time. However, in the instances the hon. Lady mentions, discretionary payments are available and will come to fruition.
	[Interruption.] 
	There is no point in Opposition Members huffing and puffing. That is the situation, and an extra £30 million has been put in place for this.
	[Interruption.]

Mr Speaker: Order. I have no idea what the hon. Member for Glasgow North West (John Robertson) had for breakfast this morning. All I can say is that he is a bear growling exceptionally, and some would say excessively, loudly this afternoon.

Jamjar Budgeting Accounts

Damian Hinds: What assessment he has made of the potential utility of jamjar budgeting accounts in (a) smoothing the transition to universal credit and (b) increasing financial inclusion.

Iain Duncan Smith: Budgeting accounts will be a useful help for some claimants both in supporting transition to universal credit and in terms of broader financial inclusion, in particular for those claimants who have not managed their money monthly before—that is an important category—or who have not been responsible for their own housing costs.

Damian Hinds: I am grateful for that answer. The demonstration projects have shown the value of jamjar accounts, and commercially they could have much wider application. In the tendering process, will my right hon. Friend pay particular attention to the unique possibilities of credit unions, given their local base and links with housing associations?

Iain Duncan Smith: I will indeed. We are doing our level best; we are giving credit unions extra money and backing them enormously to get going. I think that they will develop hugely, and I hope that they will eventually replace the payday lenders—it is really important that we all agree about that. On the jamjar accounts and the way we are making these payments, everyone warned us that there would be problems if we paid housing benefit direct. We have trialled that in one of the demonstration projects and, importantly, only 3% of those who receive their housing benefit payments direct are having to revert to indirect payments because they have been unable to cope. That is a major advance from the existing local housing allowance.

Topical Questions

Clive Betts: If he will make a statement on his departmental responsibilities.

Iain Duncan Smith: I welcome the announcement made in the autumn statement last week that housing support for those living in supported exempt accommodation will be disregarded from the benefit cap. We have listened to the concerns of organisations including Refuge, Women’s
	Aid, the National Housing Federation and others. That announcement addresses their concerns, meaning that individuals in very vulnerable circumstances, including those fleeing domestic violence, will be protected.

Clive Betts: The Secretary of State will be aware of the direct payments pilot schemes, which are taking place before universal credit, before the bedroom tax and before the changes to council tax benefit. Is he aware that the pilots are showing an increase in rent arrears due to an increase in partial payments? If that remains the case at the end of the pilots, is he prepared to change policy to make it easier for rent payments to be made direct to the landlord?

Iain Duncan Smith: I disagree with the hon. Gentleman. The figure I gave in my response to the last of the questions showed that, in actual fact, the pilots are beginning to show categorically that if there is proper management by local authorities, the number of people defaulting is very low. That we can deal with. [Interruption.] Instead of playing games, paying this direct and treating housing benefit tenants as children, does he not think that part of the reason why they crash out of work early is that they cannot cope with the extra responsibility? By getting them ready for that responsibility before they go to work we are doing them a favour, and that figure shows we are supporting them.

Tracey Crouch: Later this week, my constituent Danny Shingles will go into hospital to have a debilitating polycystic kidney removed. I am sure that the Secretary of State is aware that cysts on kidneys burst, poisoning the body and creating great discomfort. While preparing for his operation Mr Shingles is also having to appeal a decision to stop his disability living allowance and employment and support allowance, despite the fact that after his operation he will be entitled to have them again. This is causing my constituent much unnecessary stress, so will the Secretary of State review the guidance given to assessors to ensure that all factors, including the scheduling of operations, are taken into account when making decisions about whether someone is entitled to benefits?

Esther McVey: I would like to meet my hon. Friend to discuss this case, as I do not know the full facts.

Liam Byrne: Will the Secretary of State set out for the House the projected rise in the dole bill as a result of the Budget?

Iain Duncan Smith: I do not believe that there will be a dole rise. The reality is that, under this Government, in the last year we have seen more people back into work; more private sector jobs than were ever created by the previous Government; and more women in work. Unemployment levels have fallen and youth unemployment levels have fallen. Perhaps the right hon. Gentleman would like to apologise for the total mess his Government left us.

Liam Byrne: The Secretary of State clearly does not know, so let me help him. The Office for Budget Responsibility says that the dole bill will rise by £6 billion
	as a result of his failure to get Britain back to work. To pay that price, he is proposing an uprating Bill which, I am afraid to say, sounds all wrong to me. It is wrong to take £4 billion from tax credits, it is wrong to take £300 million from maternity pay, and it is wrong that this strivers tax is going to hit 4,500 working families in his constituency. He should be fixing welfare reform, not flogging working families. Perhaps he would like to tell the House this afternoon just what share of the savings from this uprating Bill is going to come from working families.

Iain Duncan Smith: I must tell the right hon. Gentleman that our unemployment figures are better than those originally forecast by the OBR. I remind him—as if he needed reminding—that he left this Government with a 6% fall in GDP, an economy that was on the rack, and debt that was higher than that of any other country in northern Europe and rising every year, with £120 million a day being spent on the interest. Let me remind him of one other thing: he has voted against every single change and every cut we have made to deal with that debt. The Opposition are irresponsible and not fit for government.

Richard Graham: I welcome the introduction of universal credit next year. However, will the Secretary of State outline how my constituents without bank accounts will in practice be able to access universal credit? Does he agree with the suggestion made by Westgate ward Councillor Paul Toleman that Post Office accounts could be a useful alternative mechanism?

Iain Duncan Smith: It is correct that Post Office accounts would be a useful measure in ensuring that we can give people the right kind of choice and the right kind of places for their accounts. Under universal credit, people will be given an opportunity to begin to live their lives in the same way as they would live them if they were back in work. That is a critical and huge change that will allow them to get back into work rather than not have to make the changes that could change their whole outlook.

Jonathan Ashworth: The Secretary of State failed to answer the substance of the question put to him by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) a few moments ago. Of those affected by the 1% uprating, 81% are women and 60% are in work. Is not the reality that this Government are clobbering the strivers?

Iain Duncan Smith: I remind the hon. Gentleman that in the autumn statement we yet again raised the threshold, which allow an extra £5 a week for families. Families on low incomes are better off and the average family is £125 better off as a result of the autumn statement.

Simon Hart: Further to earlier questions on this matter, PATCH—Pembrokeshire Action to Combat Hardship—a charity that deals with poverty issues in west Wales, is concerned about the housing component of universal credit. Will the Secretary of State confirm how he intends to define “vulnerable tenants”?

Iain Duncan Smith: Vulnerable tenants will be defined as they always have been, as people who for various specific reasons are unable to cope. All those people will be considered carefully and all the mechanisms that we are putting in place—this is the point that makes universal credit difference—mean that by ensuring that we identify those who have difficulties, we can get to them and sort out their problems rather than just dealing with the symptoms, such as their being unable to make their payments. We need to deal with why they are in debt, what is happening to their families and whether, say, the family is drug addicted and start to put those problems right before they crash out of work later on.

Dan Jarvis: The DWP recently published an evaluation that confirmed a net benefit of £7,750 per participant from the future jobs fund, a scheme that originated in my constituency. That can be set alongside Barnsley college’s successful sector-based work academy, which is already demonstrating its effectiveness in getting long-term unemployed adults into work. Does the Minister understand why, when it comes to reducing long-term unemployment, my constituents have more faith in those schemes, which originated in Barnsley, than they do in the Work programme, which came from his Department?

Mark Hoban: The hon. Gentleman should reflect on the fact that the sector-based work academy is part of the Youth Contract. It is effective and is an idea put forward by this Government. I am pleased that it is working well in Barnsley. The other thing in the Youth Contract that is working well is work experience, which is as effective as the future jobs fund but 20 times cheaper. The Government can demonstrate that we are giving help to get people into work, and are giving much better value to the taxpayer.

Robert Buckland: What further measures is the Department taking to ensure that the benefits assessment process takes into account applicants with invisible disabilities, such as autism, that are often accompanied by speech, language and communication problems?

Mark Hoban: My hon. Friend makes an important point. That is why, for example, we encourage people who feel that they cannot communicate at an assessment to take a friend or a carer with them to help in that process, and we gave support to people to help them to complete the ESA50. We want to make the process of assessment as easy and as straightforward as possible by giving vulnerable claimants the help that they need.

Huw Irranca-Davies: In my constituency, organisations such as Yellow provide accommodation solutions for young people under 25 so that they can get into work. In his deliberations on the future of housing benefit for the under-25s, how will the Secretary of State identify those youngsters who have suffered traumatic family break-ups, dysfunctional families, and sexual and physical abuse and separate them from the others? It is a genuine practical question.

Iain Duncan Smith: I can assure the hon. Gentleman that we would make every effort to ensure that those most vulnerable people would not necessarily be included
	in a change like this. As I said earlier, this is not a policy at the moment; it is a consultation, and we are happy to listen to anybody about the groups they think ought not to be included in such a policy. I have an open door in that regard, and he is more than welcome to come and see me.

Andrea Leadsom: Does my right hon. Friend agree that the best outcomes for children are where at least one parent is working? Does he also agree that all Government measures should try to support the best outcomes for children and families?

Iain Duncan Smith: I do agree with my hon. Friend. Universal credit should help that enormously through its disregard process, which I call the work allowance. The allowance of a couple with a child will be more than £6,000 when they go back into work; under the present system it is only £520, and under the Work programme it is a little more. The difference is enormous and will provide a real boost and a real income to families and support them at home.

Jim Sheridan: The Secretary of State will be aware of the ever-increasing number of workplace pensions that are wound up in mergers and takeovers, as happened at Whitbread where former employees have lost their pensions. Will he review the legislation in order properly to protect people’s pensions on mergers and takeovers?

Steve Webb: We are obviously concerned when anybody does not get the pension that they were expecting. The regulator has powers where corporate restructuring has been designed to avoid pension liabilities. If the hon. Gentleman gives me more details of the case, I will be happy to look into it.

Mike Freer: People with HIV report poor levels of understanding of their condition by Atos assessors. This may be because the guidance is outdated and lacks information on living with HIV. Will Ministers be monitoring the guidance issued on such conditions?

Mark Hoban: My hon. Friend makes an important point. One of Professor Harrington’s recommendations was that the medical directors of charities review the guidance and some of the bases of assessment for conditions. I can assure him that the guidance for HIV/ AIDS is being reviewed by the medical director of the Terrence Higgins Trust.

Nicholas Dakin: The hon. Member for North Devon (Sir Nick Harvey) was right to draw attention to the rising tide of real concern and anxiety among those threatened by the bedroom tax. How many households will be directly affected by the bedroom tax?

Steve Webb: We published a full impact assessment as part of the Welfare Reform Act 2012, which deals with this and also breaks it down on a regional level, so the figures are already available to the House.

Mark Pawsey: Getting to a job interview can sometimes be a challenge for people looking for work, so many jobseekers will be pleased to hear about a new scheme launched today called Bus for Jobs, which provides free travel, initially during January, for those seeking work. In my constituency that will be Stagecoach Midlands. Does the Minister agree that the scheme is an innovative approach by the Government to help people to find work?

Mark Hoban: My hon. Friend is absolutely right. This is important. As we heard earlier, for some people the cost of travel is a barrier to employment, and I am delighted that the major bus companies have worked together to provide free travel in January. That is on top of the additional support that Jobcentre Plus and Work programme providers offer to ensure that we get as many people as possible into work.

Barbara Keeley: Yesterday on the Directgov website, DWP job ID 438253 advertised for female presenters for Loaded TV working at home on internet babe chat. The advert has now been removed from the website, but does the Secretary of State think that DWP should be accepting and promoting jobs for internet babe chat? What does it say about this Government’s values on work?

Iain Duncan Smith: I remind the hon. Lady that it was this Government who changed the rules: under her Government, it would have been wholly acceptable, I
	suspect. The new system is in its national pathfinder and will, I hope, be rolled out before Christmas. We already have checks in place: more than 6,000 jobs, 60 attempted employer accounts and 27 bogus employers have been blocked so far, and we act swiftly if complaints are raised. I remind her that, on average, more than 5 million daily job searchers are working on this system. It will be a massive improvement and will benefit jobseekers, so the hon. Lady should not carp about the odd difficulty that arises. We get rid of the bogus jobs.

Stephen Lloyd: I congratulate the Government on extending Access to Work to disabled people on work experience and on removing the need for small companies who employ fewer than 49 people to pay for Access to Work. Will the Minister look seriously at extending Access to Work to disabled people on the Work programme because of the additional cost of their disabilities?

Mark Hoban: My hon. Friend has a great track record of championing the rights of people with disabilities. I will look carefully at the proposals he has made and work with the Minister responsible for disabled people to get the best possible outcome for people with disabilities. It is important to help them get into work.

Several hon. Members: rose—

Mr Speaker: Order. I am sorry to have to move on, but demand, as usual, exceeds supply.

Same-sex Marriage in Churches

Edward Leigh: (Urgent Question): To ask the Minister for Women and Equalities if she will make a statement on same-sex marriage in churches.

Maria Miller: Following the Government’s consultation, which looked at how to allow same-sex couples to marry, we will put forward to the House tomorrow our plans on how we intend to legislate. Our position remains that we firmly support marriage. It is one of the most important institutions we have in our country. The Government should not stop people getting married unless there are very good reasons for doing so, and I do not believe that being gay is one of them.
	In respecting the rights of gay couples to have access to civil marriage, we also fully respect the rights of religious institutions when they state that they do not wish to carry out same-sex marriages. Freedom of religious belief is as important as equality. The views that people of faith hold should not be marginalised and should be fully respected. I would never introduce a Bill that encroaches on religious freedom or that could force religious organisations or religious ministers to conduct same-sex marriages.
	The case law of the European Court of Human Rights and the rights as set out in the European convention on human rights put protection of religious belief in that matter beyond doubt. The Government’s legal position confirmed that, with appropriate legislative drafting, the chance of a successful legal challenge through domestic or European courts is negligible. I have therefore asked the Government’s lawyers to ensure that that is the case here.
	There are long-standing plans to make a statement to the House, which will now be done tomorrow. It will set out the Government’s response to the consultation and outline our plans on how to take forward equal civil marriage, in line with our decision to legislate before the end of this Parliament. I believe that it will be vital to continue to work with religious organisations to ensure that effective safeguards are in place.

Edward Leigh: Whatever one’s views on this issue, it is clearly highly controversial and legally complex. There has just been the biggest consultation ever, with four times the number of sponsors than any previous consultation. If the Government are going to announce a change of policy, surely they should come to this House of Commons first. May I ask the Minister why the Prime Minister announced on television over the weekend that, contrary to what was in the consultation, he now wants to legislate for same-sex marriage in churches? The consultation specifically excluded same-sex marriage in churches; it was about civil marriage. Now that the Government have done a U-turn on the matter, will there be a brand-new consultation? Does the Minister accept that this change of policy greatly increases the chance of human rights litigation to force churches to have same-sex marriages against their will and that we should have a consultation on that? The state has no right to redefine people’s marriages.

Maria Miller: I thank my hon. Friend for giving me the chance to talk about this today. I share the House’s disappointment that we are discussing this issue in response to an urgent question, given that I am planning to set it out tomorrow. Equally, though, I am pleased to have the opportunity to make sure that my hon. Friend is very clear about the situation. The Prime Minister did not announce anything new this weekend; he simply restated the Government’s position and, in particular, expressed a personal view regarding the possible role for churches in future—a view that he first expressed in July. However, my hon. Friend is absolutely right to say that this is an important matter that should be discussed first here in the House, and that is why we have brought forward our statement to tomorrow.
	Let me respond to a couple of other points that my hon. Friend raised. We have not changed our support for equal civil marriage; the consultation that we have just gone through is about how to put equal civil marriage in place. There may well be policy implications, on which I will be better able to provide further detail when the consultation response is set out tomorrow. I hope that he can bear with me on that, and perhaps we can give him the responses that he is looking for at that time.

Yvette Cooper: I thank the right hon. Lady for her answer, although I regret that it was not a full statement—the media were obviously briefed on Friday. Her answer raises some additional questions.
	We are clear that when couples love each other and want to make a long-term commitment, that should be cause for celebration, not discrimination, and they should be able to marry regardless of their gender or sexuality. I agree with the right hon. Lady about that. When Labour was in government, we legislated for the equalisation of the age of consent, civil partnerships, an end to the armed forces ban, and other provisions to tackle discrimination. Many of those measures were controversial among some at the time, but they were the right thing to do, as legislating for same-sex marriage is now.
	Freedom of religion rightly means that no church or religious organisation should be required to hold same-sex marriages, so can the right hon. Lady confirm that that will be in the Bill? Freedom of religion also means that people of faiths such as the Quakers, the Unitarians and others who want to be able to celebrate same-sex marriage should be able to do so. The right hon. Lady will know that I have been arguing for this for many months. Can she confirm that the Government will include that, too, in the Bill that she brings forward?
	I strongly disagree with Government Back Benchers who are not only calling for these plans to be dropped but supporting the invidious section 28, which would turn the clock back on discrimination and homophobic bullying and which should be condemned in all parts of this House.
	I also disagree with the hon. Member for Gainsborough (Mr Leigh). Marriage is not the preserve of any individual faith or organisation. Civil marriage is about the way the state views and values long-term relationships, and the state should not discriminate. Marriage laws have rightly changed before so that married women are no longer treated as their husband’s property and can no longer be legally raped—something that was possible
	as late as the 1990s. Does the right hon. Lady agree that changing the marriage laws again now to bring in same-sex marriage will strengthen rather than weaken the institution of marriage, and that we should urge everyone to support it?

Maria Miller: I thank the right hon. Lady. There are many things that one can control in this world, but media comment is certainly not one of them. However, I also draw the House’s attention to the fact that she asked me a great number of detailed policy questions that the media have not set out, so perhaps that requires more of a detailed policy announcement from us tomorrow.
	I agree with the right hon. Lady that marriage is a source of joy and celebration. The Prime Minister and I have set out really consistently in recent months that we want to make sure that more people are able to enjoy the benefits of marriage, hence the consultation that we have been carrying out. I hope that the proposals we bring forward will enjoy cross-party support; that is certainly my intention.
	The right hon. Lady is right, however, that safeguards are incredibly important for those who have deep-seated religious beliefs in this area. As I have said, I believe that the case law of the European Court of Human Rights and rights under the European convention will put protection of religious belief beyond doubt. When we, the Government, give our full response to the consultation, I am sure that I will be able to give her and other hon. Members more detail in that regard.
	The right hon. Lady is right to say that the proposals being considered by the consultation will work to strengthen the relevance of marriage in our society today and for the future. She drew on some of the innovations that have been put in place in recent centuries; perhaps this is our opportunity to make sure that marriage is relevant for our century.

Several hon. Members: rose —

Mr Speaker: Order. It is a pity that the House did not hear about the updated policy first, but it is nevertheless reassuring to know, in consequence of what the right hon. Lady has said, that the House will hear about it twice. That is very welcome.

Nick Herbert: I welcome my right hon. Friend’s response. Does she agree that, while civil partnerships were an incredibly important step forward for gay people, they are not marriages; that gay people will not feel that they are fully accepted in society while they are denied access to what is one of our most important institutions; and that that is the reason for proceeding with this reform? Will she confirm that she will press ahead with it?

Maria Miller: My right hon. Friend is tempting me to go further than I want at this stage. We will make a full statement tomorrow, but he is right that civil partnership and marriage are perceived differently. Marriage is a universally understood and recognised status and it is right that we as a society should have it open to all couples. The consultation has been looking at how we would take forward that proposal and I am sure that the consultation response will furnish the House with more details.

Ben Bradshaw: I commend the Minister for what I think is her approach—it certainly seems to be the Prime Minister’s approach—but it would have been nice to have had the statement today, because that would have saved us a great deal of time in not having to come back tomorrow. Does she recall that exactly the same warnings were made about civil partnerships? It was said that allowing some faiths to have them in church would force all churches to do it, but that did not happen. Would it not be iniquitous if those churches and faith groups that wanted to celebrate marriage on their premises were prevented from doing so because of the opposition of others?

Maria Miller: The right hon. Gentleman knows that I am here today not because I have chosen to be here, but because others have asked me to be here. As a Minister, it is always very important to come to the House if requested.
	The right hon. Gentleman is right that it is important to recognise the different views of different religious institutions. We held the consultation and wanted to talk to people more fully because we wanted to make sure that when we take forward the idea of broadening out the availability of marriage to same-sex couples, we understand in full exactly how it should be done. He is right to recognise that different groups have different views, and we will certainly consider that further.

Stephen Gilbert: I say to my right hon. Friend that in the real world this issue is neither complex nor controversial. In fact, if confirmed tomorrow, it will be widely welcomed by millions of lesbian, gay, bisexual and transgender people across our country. I very much look forward to hearing her statement tomorrow.

Maria Miller: My hon. Friend is absolutely right that there is a great deal of support for making sure that marriage remains a relevant institution in Britain today. I do not think that this has anything to do with fashion, style or modernity; it is all about fairness and equality. In considering how we make sure that our civil institutions are fair to all people in society, it is right that we look at how marriage works in Britain today.

Gerald Kaufman: Will the right hon. Lady clarify something factually? My researches, such as they are, indicate that parts of the law on marriage are opaque and that the right of places of worship to refuse to marry a man and a woman exists, although it can be challenged. In the Jewish religion, a synagogue may well refuse to marry a man and a woman if it doubts the validity of either partner’s conversion to Judaism. Am I right that she is seeking not to force any place of worship to marry somebody in a same-sex partnership, as she has made clear, but to protect places of worship that refuse to do so?

Maria Miller: The right hon. Gentleman is right that what I am trying to set out is that the Government respect all religious institutions’ right to determine whom they marry within their precincts. I have set that out as my priority, as has the Prime Minister this weekend and last summer. Right hon. and hon. Members are rightly
	focused on such safeguards. I am sure that we will look at that matter closely when we talk about the consultation response.

Peter Bottomley: I suspect that the opposition to the Government’s proposals would be far less if Mr Colin Hart and his so-called Coalition for Marriage had not sent out hundreds of thousands of letters aimed at constituents of particular political persuasions to say that they should not vote for their party if the proposals go ahead. May I challenge Mr Hart, through my right hon. Friend, to come into the open and justify what he has done, and to defend himself to the Archbishop of York and the former Archbishop of Canterbury? I think that what has happened is disgusting.

Maria Miller: My hon. Friend is right that we have to look at the facts when it comes to the ability of religious organisations to continue to determine what happens in their own precincts, organisations and churches. There has been quite a lot of hyperbole over the implications of what we are talking about. The Government’s objective is simple: we want to ensure that marriage, which is a hugely valued part of our society, is open to more people. I think that that should be applauded.

Chris Bryant: Having married more people than I can remember—as a vicar, that is—I have never understood how extending marriage to more people could invalidate the marriage of other people who are already married. I wholeheartedly support what the Government are doing. I remind the Minister that the Prayer Book of 1662 states that marriage is
	“ordained for the mutual society, help and comfort, that the one ought to have of the other, both in prosperity and adversity.”
	Why on earth would any Christian want to deny that to anybody? Is it not right, therefore, that the Minister will categorically allow churches to do that?

Maria Miller: The hon. Gentleman is again taking me into things that we will come on to tomorrow, such as the role of churches. Unlike him, I have married only once, but I married well, so I am lucky. He is right that marriage strengthens our society and that the proposals will strengthen it further. This is a rare opportunity for the hon. Gentleman and I to agree, and I will savour the moment for as long as I can. I am sure that we will continue to be in agreement as we look at the detail of what comes forward.

Tony Baldry: My right hon. Friend will know that one of the many important issues for the Church of England and other Churches is that the Bill must do what the Government purport that it will do and provide statutory protection so that Churches that do not want to carry out same-sex marriages are not forced to do so. Will my right hon. Friend give an undertaking that she will ask her officials to work with me in my capacity as Second Church Estates Commissioner and with lawyers for the Church of England and other Churches to ensure that by Second Reading we are all confident that the quadruple lock protection, which will
	hopefully be in the Bill, will do what we all hope it will do, which is to give the Churches the protection that the Government wish to give them?

Maria Miller: I very much value my hon. Friend’s contribution and he is right to say that our objective of ensuring that no organisation is forced into doing something that it does not want to do must be made absolutely clear. I give my hon. Friend a complete undertaking that my officials will work with him—well before Second Reading, I am sure—to ensure that he and other religious leaders are content with proposals that may be forthcoming around the future of equal civil marriage. We all share the objective of wanting to ensure that individuals who want to be married can be married, but that institutions that want to protect their freedoms and religious beliefs have that protection.

Ian Paisley Jnr: If marriage is opened to allow individuals to marry one another regardless of sex or gender, article 12 of the European convention on human rights will apply to both same-sex and opposite-sex marriages. If that is the case, will the Minister seek a derogation under the convention to protect churches, rectors and church trustees who do not want to hold same-sex marriages in their buildings, in order to protect their rights, freedoms and religious identity?

Maria Miller: The hon. Gentleman is drawing me into a great deal of detail—exactly the sort of detail that a Bill Committee would look at in the development of any legislation. He is right to say that such detail is important and must respect freedom on both sides, and I am sure such matters would be considered on Second Reading and in Committee. I remind the hon. Gentleman that the situation in Northern Ireland will be different; this is a devolved matter and the Northern Ireland Government may take a different view.

David Burrowes: Will my right hon. Friend confirm that approximately 500,000 people who responded to the Government’s consultation by saying no to redefining marriage have been excluded from the Government’s consultation and effectively denied a voice, although others—including those beyond the United Kingdom—have been included in that consultation? Is the consultation in danger of being seen as a sham that does not provide the Government with a mandate to redefine marriage?

Maria Miller: We have taken into account all valid contributions to the consultation, which was exceptionally important in shaping and forming the Government’s view on how we take forward equal civil marriage. More than a quarter of a million people responded to the consultation and we have taken time to consider their responses in detail. I assure my hon. Friend that those responses were integral to how the policy has been taken forward.

Stephen Doughty: Does the right hon. Lady agree that most parents would prefer their children to be happy, rather than prefer them not to be gay?

Maria Miller: I think it is important that children are happy, and whether an individual is gay, bisexual or heterosexual is really a personal matter.

Jake Berry: Some of us have no interest in what happens behind people’s bedroom doors but might be slightly more concerned about what the legislation will do behind the church door. In her opening comments my right hon. Friend described the legal challenge as negligible. Will she publish all the legal advice that the Government have been given on the possibility of Churches, and other religious groups, being forced to conduct same-sex partnership ceremonies?

Maria Miller: My hon. Friend will know that the Government do not publish legal advice, but he can be assured that the work we are doing is in accordance with the law. I state again that European Court case law and the European convention on human rights put the protection of religious belief beyond doubt. The whole House should welcome that, and we will ensure that we have the sorts of protections that—as I hear from all sides—are very much wanted.

Yvonne Fovargue: Does the Minister agree that freedom of religion works both ways? Although it is right that no religious group should be forced to marry same-sex couples if it does not wish to do so, the faith groups that wish to marry same-sex couples should be allowed to do so.

Maria Miller: I personally agree with the hon. Lady. Indeed, the Prime Minister said so not just this weekend but last summer.

John Baron: I very much support the Government’s position, but some Churches in my constituency are concerned that they will be forced—perhaps through the courts—to hold same-sex marriages on their premises. What assurances can the Minister give that the Government’s correct ruling will not be overturned in the courts, whether in this country or on the continent?

Maria Miller: My hon. Friend is right—we do not believe that any religious organisation should be forced to do something that is beyond their belief and faith. I direct him to case law of the European Court, which has made clear that those are issues for individual countries and not something on which it will rule centrally.

Susan Elan Jones: Some Churches in our country allow marriages only of members of their fellowships. Equally, some Churches will not allow the remarriage of divorced people. Many different faith groups have different rules. If that has not been seriously challenged in the past 10 years, does the Minister agree that it is highly unlikely that there will be such a challenge to same-sex marriages?

Maria Miller: I could not have put it better myself; the hon. Lady makes an extremely strong point.

David Nuttall: With Christmas just around the corner, lots of people might be thinking of giving a dictionary as a present. Before they do so, and for the benefit of dictionary publishers, will the Minister say whether the Government have any plans to change the definition of any other words?

Maria Miller: No—not at all.

Andy Slaughter: In the light of the Minister’s earlier comments, what is her view of the statement made by her hon. Friend the Member for Monmouth (David T. C. Davies) over the weekend? Does she believe it contributes well to the debate?

Maria Miller: All such views need to be taken into account. People should be able to say what they think on this matter and we should not stifle debate. Suffice it to say that I believe marriage is hugely important. It is vital that all religious institutions continue to be protected and that we ensure that marriage is open to more people in future. The comments of my hon. Friend the Member for Monmouth (David T. C. Davies) are a matter for him.

Peter Bone: I am a Christian and I am against the redefinition of marriage, but that is for tomorrow. The urgent question today is why on earth the Government briefed in advance about a new policy and a change to the previous position. The Minister has condemned that herself in the past. Will she have a word with the Prime Minister and tell him off?

Maria Miller: My hon. Friend might be jumping to one or two conclusions. It is right that we discuss policies first and foremost in the House. I have a long-standing commitment to make a statement in the House this week, but have brought it forward to tomorrow. I share the House’s concern and disappointment that there has been such widespread discussion this weekend, but we will be able to go into the detail tomorrow.

Kevin Brennan: What does the Secretary of State think triggered the discussion this weekend?

Maria Miller: The hon. Gentleman can go and talk to the journalist concerned and find out.

Mike Freer: The Movement for Reform Judaism is headquartered in my constituency, and is a large faith group that wishes to have same-sex marriage. Is this legislation not in the best Conservative principles of expanding personal choice while protecting religious freedoms?

Maria Miller: As on so many things, my hon. Friend is absolutely right.

William Bain: Although there will be a separate Bill in the Scottish Parliament on this issue, there is strong cross-party support for the policy that the Minister has nearly announced today. In Scotland, 68% of people believe that religious organisations that want to be able and free to marry same-sex couples under the law should be able to do so. What discussions has she had with the Scottish Government about whether any provisions in the draft Bill she may announce tomorrow will apply in Scotland?

Maria Miller: The hon. Gentleman is right: on issues as important as this, cross-party support is crucial. I just urge him to make sure that he also respects those
	who may not agree with same-sex marriage being open to all religious institutions. It is important that we show that respect throughout. I can assure him that my officials have been in intensive discussions not only with the Scottish Government, but in Northern Ireland and Wales. This affects all parts of the country, and we want to ensure that there is full co-operation wherever possible.

Julian Brazier: Will my right hon. Friend reassure us that whatever is announced tomorrow, no teacher will face prosecution or civil action as a result of espousing a Christian view of marriage?

Maria Miller: My hon. Friend is right to raise this issue, which has been a concern for many of our constituents. I can confirm that nothing will change what children are taught. Teachers will be able to describe their belief that marriage is between a man and a woman, while acknowledging that same-sex marriage will be available. It is important to reassure people. There is a great deal of what perhaps one could call scaremongering. It is important that teachers and faith schools are aware that they will continue to enjoy the same situation as they do now.

Lilian Greenwood: On Friday, the Prime Minister said that he would allow churches to hold same-sex marriages if they wanted to. Will that be in the Bill—yes or no?

Maria Miller: I think the Prime Minister made it clear that his own personal view was that that should be the case. The hon. Lady will have to wait perhaps a little less than 24 hours to see the details for herself.

Jane Ellison: On a broad rather than a detailed point, perhaps the Minister has, like me, met young people who have been forced out of homes by families who did not accept them being gay. Does she agree that a change towards equal marriage is an important way in which society can send a signal that their contribution is greatly valued today?

Maria Miller: My hon. Friend is right to say that we should all be striving for equality in civil life. In ensuring equality for citizens, however, we should respect the right of faith groups to have their beliefs too. Religious freedom and equality are two things that we should all cherish and protect in any way we can.

Emma Reynolds: I welcome what the Minister has said, and I agree with the Government’s plans to introduce legislation to allow same-sex marriage. However, I am a little confused about what will happen between now and tomorrow’s statement. Will she confirm that every single member of the Cabinet agrees with the proposals and will vote for them when they come before the House?

Maria Miller: The hon. Lady will know—well, maybe she was not in the previous Labour Government—that we are in the process of finalising this policy in the usual way, but to ensure that the House is fully informed as quickly as possible, I have speeded up that process.

John Leech: I welcome the Minister’s assurance that if the Government plan to expand equal marriage to churches willing to carry out the ceremonies, other churches have nothing to fear. After tomorrow’s statement, will she seek to reassure those churches that they have nothing to fear from the legislation?

Maria Miller: My hon. Friend is right about the importance of providing reassurance and working with religious institutions. I will be speaking personally with heads of religious groups, and my ministerial colleagues in the Equalities Office will be doing likewise. This is the start of a process of ensuring that they can be confident that the protections will be robust and effective.

Huw Irranca-Davies: As someone with a long-term personal investment in the institution of marriage, I can thoroughly recommend it to everyone who wants it. Nevertheless, will the Minister also introduce proposals for those who do not want the institution, such as heterosexual couples who want a civil partnership rather than a marriage? I have constituents who have raised this with me.

Maria Miller: I am sure that the question of civil partnership will be addressed as part of the consultation response, but I suggest to the hon. Gentleman that civil partnership was never put forward as a replacement for marriage, and I am not sure it is something we want to open up to more people.

Stuart Andrew: I want to live in a free society, and at the heart of a free society surely lies personal freedom and religious freedom. Will my right hon. Friend confirm that this proposal simply upholds those principles, affording those of us who might want to commit the opportunity to do so, and the power for religious organisations to decide whether to offer it? Given that getting married is a significant event in anybody’s life, I wonder who would want to get married in a church that did not want them.

Maria Miller: My hon. Friend is right that this is about personal freedom. Our society greatly values equality and fairness, and for me the extension of civil marriage to same-sex couples is absolutely about equality and fairness.

Nadhim Zahawi: Many people of faith in Stratford-on-Avon are rightly concerned about the Bill, and I hope that tomorrow we will see freedom of religion front and centre of the proposals, but the big question is about discrimination. Up until 1967, 16 states in America banned interracial marriage; it was only overturned in 1967. I am sure that no one in the House would argue on moral grounds to ban interracial marriage today. Let us get rid of discrimination and protect freedom of religion.

Maria Miller: My hon. Friend is right to focus on the importance of freedom of religion and the need to ensure that faith groups that want to can continue to voice their belief that marriage is between a man and a woman, rather than between two people of the same sex. Perhaps even more important than this issue of marriage, however, is the role of faith groups in our
	society. Many faith groups might feel that they have been marginalised in recent years and are not central to some of the debates in this country. This is a healthy debate about the importance of protecting our religious freedoms, while taking forward civil marriage in a way that opens it up to more people in our community. It is important that we do not marginalise people of faith and that they are absolutely respected and at the heart of this proposal.

Robert Halfon: This country has found it hard to resist prisoner voting, despite the majority of the House having voted against it, so can my right hon. Friend appreciate that many hundreds of my constituents from faith groups are understandably concerned about legal challenge?

Maria Miller: My hon. Friend is right to bring up the issue of prisoner voting—it is something that many in the House feel strongly about—but it is not the same as marriage. The European convention on human rights contains clear protections for religious belief, and the fact that marriage is at the heart of many religious institutions’ beliefs means that it is clearly protected. As I have said, we believe that rulings in European case law have put this matter beyond doubt.

Crispin Blunt: Before my right hon. Friend gives us the Government’s proposals in response to the consultation tomorrow, may I thank the Prime Minister through her for his constitutionally rather unusual personal statement on Friday and again thank him as leader of the Conservative party for intending to give Conservative Members of Parliament a free vote? On an issue such as this, that is something we should see across the House.

Maria Miller: My hon. Friend is right to say that this is all about balancing freedom of the individual with equality—freedom for people of faith to follow the views of their faith and freedom for individuals in same-sex relationships to take part in civil marriages in the way that heterosexual couples do.

Jason McCartney: Does my right hon. Friend, like me, look forward to a day when we no longer talk about “equal marriage”, “gay marriage” or “same-sex marriage”, but just talk about marriage—a loving commitment between two people who want to love each other and be with each other?

Maria Miller: My hon. Friend is right. Having been married for many years—many hon. Members will be aware of this as well—I know that marriage brings a stability to life and creates a loving place to bring up children. That is important to recognise, but we absolutely have to respect the rights of religious institutions to take a different view. As a sophisticated and mature society, we should be able to enter that debate with respect on both sides.

Craig Whittaker: My right hon. Friend said that the views of people of faith should never be marginalised. Will she tell the House how she will square that with the 619,007 people who have signed the Coalition for Marriage petition, which calls for no change in the definition of marriage?

Maria Miller: As my hon. Friend will know, for more than 180 years there have been two different ways to enter into marriage—one through a religious ceremony, the other through a civil ceremony—so the role of religious organisations in marriage is there indelibly. To ensure that those views absolutely continue to be centre stage, I am working on safeguarding the freedom to continue to view marriage in a different way in different religious institutions, but that in no way means that we have to stop individuals in same-sex relationships being able to be married as well.

Matthew Offord: Many Members have expressed the sentiment that marriage is at the centre of religious life—amen to all that—but have the Government considered introducing other forms of marriage, such as polygamy, and if not, when can minorities who believe in such a practice expect their own consultation?

Maria Miller: I think the law is pretty clear on this. Marriage is between two people, which means that what my hon. Friend talks about would not be possible.

Brooks Newmark: While I deplore discrimination on any level and will certainly be supporting same-sex civil marriage—I am glad that the Government are now considering supporting those religious institutions that support that—I have many constituents from more orthodox communities, whether Jewish, Christian or Muslim. What assurance will the Government give to protect their beliefs?

Maria Miller: We will be absolutely making it clear to them that the safeguards that are in place are not safeguards purely for the Church of England—or indeed just for Christian Churches—but safeguards for religious institutions across the board. My hon. Friend is absolutely right that there are different views in different religious groups. We have to respect those views. It is important that we work with all such religious organisations to ensure that they understand the safeguards we will put in place and agree that they will work by providing them with effective protection.

Gavin Barwell: As a strong believer in the importance of marriage to our society, may I warmly welcome what my right hon. Friend has said? Does she agree that it should not be beyond the wit of this House to devise a Bill that addresses the concerns of many Churches, synagogues and mosques, as expressed by my hon. Friend the Member for Gainsborough (Mr Leigh), while still allowing two men or two women who love each other to exchange the same vows and enjoy exactly the same legal rights that my wife and I enjoy?

Maria Miller: I am sure my hon. Friend is absolutely right. This is about all of us helping to ensure that the facts are communicated effectively to our constituents. There has been a great deal of campaigning on this matter, and people might sometimes have misunderstood the case law from the European Court’s rulings. Now is the time for sober reflection, to ensure that people get the facts rather than the hyperbole, and that they understand that it is possible to provide safeguards as well as equality for same-sex couples in this country.

Michael Ellis: I congratulate the Minister on this welcome proposal. Does she agree that making marriage legal for a wider cohort of people through same-sex marriages does not in any way weaken or detract from the marriages of heterosexual people? As a House, and as a society, we need to factor in that equality under the law is as important as religious freedom.

Maria Miller: My hon. Friend is right to say that this is all about strengthening marriage. Any individual who marries takes on a huge responsibility. Marriage strengthens our society and underlines commitment, and we should all welcome the fact that this move will enable more people to marry. This is as relevant today as it was 180 years ago.

Therese Coffey: Earlier this year, permission was granted for civil partnership ceremonies to be held in religious institutions. Will the Minister tell the House how many times that has actually happened?

Maria Miller: I will have to get back to my hon. Friend with those exact data, but I am sure that all the ceremonies that have taken place have been joyous occasions.

Iain Stewart: Has my right hon. Friend had a chance to examine the experience of those other European countries that have legalised same-sex marriage? Have any churches in those countries been forced to marry a couple against their faith?

Maria Miller: The simple answer to that is no. Many European countries have permitted same-sex marriage for many years. Denmark, for example, adopted such a policy in 1989, and now Spain, Canada and many others are putting in place similar legislation. This reflects societies that are willing to embrace change while ensuring that protection for important religious institutions is in place.

Guy Opperman: As a lawyer, I have tested the ECHR rules and articles at great length in the British courts and in Strasbourg. I therefore welcome the proposed protections that will be enshrined in this law. Does the Minister agree that this is fundamentally a matter of choice for the couples as well as for the religious institutions that we so revere?

Maria Miller: My hon. Friend has made his point extremely clearly. This is about ensuring that that choice exists. I would add that it is also about showing respect, and that both sides showing respect will go a long way towards ensuring that we come out of this with a policy of which this country can be proud.

Bob Stewart: Can my right hon. Friend explain why the Government are so hellbent on upsetting so many thousands of our citizens who are in normal marriages, especially at this time?

Maria Miller: I do not think that anything I have set out today—or that my colleagues have talked about in recent days, weeks and months—does anything to upset anybody who is already in a marriage. I respect the point that my hon. Friend makes, which is that some people with a religious faith feel that this matter falls
	outwith their faith. I absolutely respect that, and it is important that we introduce clear safeguards and protections so that he, his constituents and others can understand that we are talking about strengthening marriage and not about undermining it.

Gordon Henderson: The suggestion that the Government’s proposals need not necessarily impact on religious belief is nonsense. The definition of marriage is the joining together of a man and a woman in holy matrimony, and allowing same-sex marriages will therefore require a redefinition of the term. Such a redefinition would undermine one of the basic tenets of many religious institutions, so it definitely would impact on religious belief. That is not scaremongering; that is fact.

Maria Miller: My hon. Friend has his views, and he articulates them clearly. There are already two different ways into marriage: through a civil ceremony or a religious ceremony. What we have to do is respect the fact that religious organisations may well continue to want to have a different approach to marriage than the state’s approach. I think it is important for the state not to show a disregard for the importance of equality and respecting the rights of same-sex couples. That is at the heart of the debate that will be had.

Andrea Leadsom: My right hon. Friend shows herself to be a strong and passionate advocate for the institution of marriage. Will she therefore agree to articulate her support for marriage in Cabinet by supporting it in the tax system, as advocated in the coalition agreement?

Maria Miller: My hon. Friend may know—she can check the media cuttings on this—that for many years, ever since I have been a Member of Parliament, I have been a strong advocate of marriage. I am glad to see so many people in the Chamber supporting it. The tax system is very much an issue for the Chancellor, but she will know that recognition of marriage in the tax system is important and that the Chancellor has considered it in the past.

Rehman Chishti: Coming from an Islamic background, and with a father who was an imam, may I ask the Minister to clarify what response she has received from the Muslim community on this consultation?

Maria Miller: The response from the Muslim community, as I am sure my hon. Friend will be aware, has been one of some concern, as it has been from other religious institutions, to ensure that a clear safeguard is in place for the religious beliefs of the Muslim community, in the same way as Christians or any other religious group want respect for their beliefs. I can give him a clear undertaking that my officials and I will work with all religious groups and make sure that they understand how we will put the safeguards in place and ensure their efficacy.

Mr Speaker: I look forward to welcoming the Minister back tomorrow for part 2. I look forward to what I am sure will be her joyous statement and to the prospect of questioning thereon.

Remploy

Liam Byrne: (Urgent Question): To ask the Minister if she will make a statement about the end of Remploy.

Esther McVey: I am grateful for the opportunity to provide the House with an update on Remploy. On Thursday, I laid a written statement in the House about stage 2 of Remploy factories—a continuation of a process announced by my predecessor, now Secretary of State for Culture, Media and Sport, on 7 March. She then gave a further statement to the House on 10 July. In it, the Remploy board announced the outcome of its analysis of the remaining stage 2 businesses. Remploy will now start a commercial process to mitigate potential job losses. At this stage, no final decisions have been made about factory closures or redundancies. Our priority throughout the process is to safeguard jobs, which is why we are offering a wage subsidy of £6,400 for each disabled employee to encourage interested parties to come forward.
	We want substantially to improve employment opportunities for all disabled people. We engaged with disability experts and organisations to undertake a review of our specialist disability employment support. The Sayce review findings and the responses we received to the public consultation strongly supported the idea of moving away from the Remploy model for disabled people.
	The first point that I want to make is that a sixth of the money for the sustained employment of disabled people is currently spent on supporting the Remploy factories, which means that a sixth of the budget went to 2,200 out of 6.9 million disabled people of working age. I remind the House that, before the last Government closed 29 factories, the right hon. Member for Neath (Mr Hain) said:
	“The reality is that without modernisation Remploy deficits would obliterate our other programmes to help disabled people into mainstream work.”—[Official Report, 29 November 2007; Vol. 468, c. 448.]
	The current Government are committed to protecting the budget of £320 million for specialist disability employment support, but we know that we must use that money much more effectively to help far more disabled people to fulfil their ambitions and move into mainstream work. In these economically difficult times, it is more important than ever for the Government’s disability employment programmes to represent value for money and to deliver the most effective possible support to help disabled people to find and keep employment.
	Remploy has faced an uncertain future for many years, and in 2008, under the last Government, 29 factories closed. A modernisation plan failed, having set excessively ambitious targets which were never achieved. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) knows that only too well. As a result, the factories have become increasingly loss-making, and their future has become more precarious. That has left all staff in a vulnerable position. The answer must be to find them work and help them into mainstream employment, and the changes that are being made are focused on ensuring that they all obtain long-term, sustainable jobs.
	I do, of course, understand how unsettling it is for Remploy employees to find that they are faced with the threat of losing their jobs. I know that a large number of them have given many years of service, and that they now face the prospect of looking for alternative work. That is why we set up the people help and support package especially for them. All disabled Remploy staff affected by the changes who give their consent will be guaranteed access to £8 million of tailored support to help them to find alternative employment. Despite a slow start, we are making a number of improvements to the package. Over the past three months, 148 of the 960 or so disabled people who have come forward to work with us and our personal case workers have found employment. We have every expectation that the number of job outcomes, which is already increasing daily, will increase further. We are monitoring and tracking these people and helping them to obtain work, which is something that the last Government never did when they closed their factories.
	Jobcentre Plus reached agreements today with five major national employers—some of the biggest high street retailers and restaurant chains—to help ex-Remploy staff into work, and they will also have access to support from Remploy Employment Services. Since 2010, despite the tough economic climate, it has found 50,000 jobs for disabled and disadvantaged people, many of whose disabilities are similar to those of staff in Remploy factories.
	Let me give a few instances of former Remploy staff who have begun work in a vast array of jobs. Four former employees from Aberdeen have started a co-operative business in their old factory. Red Rock Data Processing Services in Wigan is reopening its factory and employing former Remploy staff. Ex-employees have found work at Dekko Windows in Oldham, Camborne college in Penzance and Hayman Construction in Plymouth, and at Asda. All those people are moving into mainstream work, and I expect that, as the support continues, we shall see an increasing number of such good outcomes.
	I have met many Members on both sides of the House to discuss this matter, and I shall continue to do so. We seek the best possible outcomes and opportunities for all Remploy staff.

Mr Speaker: I am grateful to the Minister. She did somewhat exceed her allotted time, which simply means that I must allow some modest latitude to the right hon. Member for Birmingham, Hodge Hill (Mr Byrne).

Liam Byrne: May I start, Mr Speaker, by saying how grateful we are to you for allowing this urgent question this afternoon? I say to the Minister that, frankly, it is shameful that her Department tried to sneak out through a written ministerial statement last week news that it was shutting a further 10 Remploy factories and putting five more at risk. It was a mark of contempt for Remploy workers that the Minister sought to duck a debate in the House.
	This statement marks the destruction of a tradition that stretches back to the foundation of the welfare state. If there is an ideal that Labour Members cherish, it is that the welfare state should be strong on the ethic to work and strong on the ethic to care. Remploy epitomises both those ideals, yet over the past year all we have heard from the Government is one plan after
	another to close Remploy down, without any regard for how its workers are connected to a future—to jobs and prosperity in the years to come.
	Months ago, a Minister from this Department promised the House that the Government would move hell and high water to ensure sacked Remploy workers got into jobs, yet today about 90% of those workers sacked this year are still out of work. That is not good enough. The Work programme is not delivering for disabled people. Fewer than 1% of people on employment and support allowance have been found sustained jobs. When we undertook the modernisation of Remploy, we set aside £500 million to help support the process. I am afraid that is in sharp contrast to what we heard from the Minister this afternoon.
	It is now apparent that this closure programme must stop until we are clear about what has gone wrong in getting sacked Remploy workers back into jobs. We need to learn far more from the example set by the Welsh Government, who have already provided 97 opportunities for 250 workers who have lost their jobs. The Minister will have heard, as I have, just how important this is, because she will know, as I do, that for Remploy workers their job is far more than simply an income; it is their connection to a social network and to a world outside. It is often everything to them.
	Let me ask the Minister this: will she apologise to the House for trying to sneak this announcement out through a written ministerial statement? Especially after the Secretary of State dismissed Remploy workers as doing nothing more than sitting around drinking coffee, I think that that would be an appropriate gesture. Will the Minister stop this closure programme until we have a report on the table from her Department about what has gone wrong in getting the workers sacked earlier this year back into jobs? Specifically in respect of Wales, will she take up the proposal of Leighton Andrews that two factories in Wales be transferred to the Welsh Government, because although she does not feel they have a future, the Government of Wales certainly do?

Esther McVey: I am quite taken aback by your bluster and, I have to say, false words. Your words would have far more emphasis—[Interruption.] The right hon. Gentleman’s words would have far more worth were it not for the fact that he put these plans into place in the first instance. Indeed, he closed 29 factories in 2008 and rightly put in a lot of money, but it was put into a failed modernisation plan with targets that could never be reached. A target of 130% was expected of public sector contracts; that never happened. Worse still, he has the temerity to talk to us about what we have put in place for individual workers when he did absolutely nothing; he did not track them, and he did not put in place any personalised casework or any support. That is really rather shocking.
	The right hon. Gentleman might be making cheap jibes and cheap statements on the back of these workers, but frankly I find that rather disingenuous and beneath him. He has a failed modernisation plan behind him, and also failed support, and he was also the chap who said that no money was left in the bank. I will not apologise, therefore, because, frankly, I am picking up his pieces.

Mr Speaker: Order. I am sure the Minister was not suggesting that anybody would knowingly mislead the House.

Esther McVey: No.

Mr Speaker: I was guilty of many cheap gibes and bluster as a Back Bencher, but the Speaker does not engage in cheap gibes or bluster. Just as long as we are clear about that—very good.

Conor Burns: The Minister will be aware that the Remploy factory at Alder Hills in my constituency closed; she wrote to tell me that it was closing in her first days in her new job. She will also be aware that Giles Verdon and his team at that factory were working to put together a community interest company. May I tell her that in all their dealings with Remploy centrally phone calls went unanswered, information requested was not forthcoming and deadlines were too short? They did not stand a chance. Will she agree to meet me and representatives of Remploy in Poole so that they can tell her about their experience in dealing with Remploy centrally?

Esther McVey: I will indeed meet my hon. Friend, just as I have met so many hon. Members to discuss the best way forward and to learn from what has happened so far.

Jim McGovern: I am on record as saying that I have been to the Remploy factory in my constituency so often that I am on first-name terms with most of the work force, and I have always regarded them as a happy work force who are reasonably well paid and happy to be where they are. This morning, I visited that factory and, needless to say, found that the work force are distraught at the fact that they are going to be closed down. What succour can the Minister give the Remploy work force in Dundee? What sort of perverse policy is it for a Government to throw the disabled work force on the dole and then tell them that if they cannot find alternative work they should work for nothing?

Esther McVey: An announcement has been made and there is now a 90-day consultation to find out who would wish to take over the business as an ongoing concern; otherwise it is open for people to buy the assets to open up social enterprises, as has happened in Aberdeen and is happening in Wigan. I also wish to mention at this point that in the hon. Gentleman’s constituency there are 10,300 people with disabilities, while at the factory itself there are 37, and that last year alone Remploy Employment Services did find 169 people jobs. First we have to go through the process and see what we can do for the good people of Dundee.

Paul Maynard: Labour Members are very keen to list disability charities when they happen to be in agreement with each other. Having listened to Labour Members preach equality for the past hour on the previous urgent question, will the Minister remind me how many disability charities—and which ones—made a contribution to the Sayce review supporting the Labour party’s policy of segregated employment for the disabled?

Esther McVey: The vast bulk of charities agreed with the Liz Sayce review and added to that, so my hon. Friend makes a very good point.

Several hon. Members: rose —

Mr Speaker: I call Mr Chris Bryant.

Chris Bryant: Right—I did not expect to be called quite so soon, Mr Speaker.

Mr Speaker: This is a first; is the hon. Gentleman speechless?

Chris Bryant: Thank you very much, Mr Speaker.
	The real problem at the Remploy factory in the Rhondda is that, although the vast majority of disabled people in the Rhondda are in mainstream employment, we have 72 people there who are affected, some of whom have been transferred from a previous Remploy factory that was closed, and we have rising unemployment and very little prospect of jobs for people. So will the Minister please take up the offer that Leighton Andrews, the Assembly Member for the Rhondda and also a Minister in the Welsh Assembly Government, made to take over the Welsh factories with their assets, so that if she is not prepared to do anything to protect these jobs, the Welsh Assembly can?

Esther McVey: I will correct the hon. Gentleman; we are doing everything we can to protect jobs for disabled people. I spoke with Leighton Andrews last week on what we have agreed to put in place; obviously the commercial process has to be gone through correctly, as other people might put a better offer on the table. What we have to do is get the best offer for those disabled people, whom we so want to help. Should Leighton Andrews have the best offer, that will be the path we take.

Philip Davies: My hon. Friend will know that I did not favour closing any Remploy factories, but does she agree that it sticks in the throat to hear the feigned outrage of the Opposition, who closed 29 factories without a care in the world? Nobody could do more than she is doing to try to help these disabled people to find jobs. May I urge her to continue on that path, because at a time when so many people do not want to work we should do everything we can to help these people, who do want to work?

Esther McVey: I totally agree with my hon. Friend and we are working tirelessly every day. We are getting updates every day on how we are getting the ex-Remploy staff into work. As I mentioned earlier, when I first came to the House 35 people had a job. Within three months, by beefing up the personal support work, we have more than quadrupled the number who get into work. We are doing a positive job and we will continue to do so.

Anne Begg: May I just clarify what the Minister said about the situation in Aberdeen? A group of workers have set up a public interest company, but they have had to move out of the Remploy factory because it is now closed. The group of workers who have managed to get themselves together and continue to produce textiles have managed that despite Remploy, not because of it.
	Will the Minister tell us what the Government’s position is on sheltered workshops and sheltered placements for disabled workers? Are they in favour of them or not?

Esther McVey: What we are in favour of is getting as many disabled people as possible—there are 6.9 million disabled people of working age—into mainstream work. If anything will help with that journey for those people, we will be in favour of it.

Stephen Mosley: Last year, the Remploy factories made a £70 million loss. I listened carefully to the shadow Secretary of State and he gave no indication of how that loss could be made up. Has my hon. Friend the Minister received any representations from Opposition Members on how that £70 million gap can be filled?

Esther McVey: My hon. Friend makes a good point. No, I have heard no ideas on how that gap would be filled—it would be another spending commitment from the Opposition requiring more money. They have lots of things they oppose but no ideas about what they would actually do.

Jonathan Edwards: The previous Government closed the Brynaman Remploy factory in my constituency. In the space of a year, this Government have announced the closure of the remaining nine Remploy factories in Wales—different Government, same policy. Why not just agree to the Welsh Government’s reasonable request for devolved control over the Welsh Remploy sites?

Esther McVey: I feel that I have already answered that question in responding to the hon. Member for Rhondda (Chris Bryant). It is part of a commercial process, and should that offer be the best for the staff at Remploy, that will be the path we take. Should somebody else come up with a better offer to support more disabled people, we will obviously pursue that, because we want to see more of these people in work.

Bob Stewart: Can my hon. Friend explain to me what special arrangements might be made for Remploy employees who lose their jobs but who were disabled in the service of their country?

Esther McVey: We have significant measures in place for ex-members of the armed forces which are the responsibility of the Ministry of Defence but are supported by the DWP.

Julie Elliott: The Minister did not come to the Chamber to inform the House of the closure of a number of Remploy factories, including the one in my constituency. The local trade union rep from GMB has not yet been invited into the factory, in breach of the accord. Does she feel that that is an appropriate way to treat Remploy workers, some of the most vulnerable workers in our society, who are in danger of losing their jobs?

Esther McVey: The hon. Lady is correct to say that I made a written statement to the House. I have met many Members, trade unions and ex-members of Remploy to figure out the best way forward. I had one-on-one
	meetings because, as the hon. Lady will appreciate, each of the factories is significantly different, with different commercial processes and outcomes. It makes far more sense to deal with this on an individual basis so that we can put the personalised support in place.

David Nuttall: Does the Minister agree that the policy is all about helping disabled people into mainstream employment and not at all about cutting the budget for disabled employment support, which despite the difficult economic circumstances is being protected?

Esther McVey: I agree with my hon. Friend, and that is precisely what the Sayce review recommended—that we get as many people as possible into mainstream work. There were 2,200 disabled people working at the Remploy factories, and in the last two years alone Remploy Employment Services has put 50,000 similar people into mainstream work.

Thomas Docherty: The Minister will be aware that the two factories in Fife, in Cowdenbeath in my constituency and in Leven, are both left in limbo and unclear about their future. Will she meet me and my hon. Friend the Member for Glenrothes (Lindsay Roy) early in the new year so that we can understand better the possible options for the future of those two important factories?

Esther McVey: I will indeed meet the hon. Gentleman at his earliest possible convenience and mine.

Nick de Bois: Is not the reality that there is a total consensus among disabled people’s organisations and charities that segregated employment is not really the model for the 21st century?

Esther McVey: My hon. Friend is correct; more and more people are calling for disabled people to be in mainstream jobs. I believe in choice and that people should choose where they wish to work, but mainstream work is what most people must aim for.

Sharon Hodgson: The facts and figures, rather than the rhetoric, in respect of former Remploy employees throughout the north-east who have so far been helped back into work are truly shocking: Gateshead, none out of 13; Newcastle, six out of 56; Ashington, one out of 26; and Spennymoor, three out of 41. Given that appalling failure to support the workers to find new jobs, does the Minister really think that now, just two weeks before Christmas, is the right time to make 35 workers at the Sunderland factory redundant?

Esther McVey: The hon. Lady is quite right; as I mentioned in my statement, it has been a low start, but the numbers are increasing daily and we are doing as much as we possibly can. When I was given the choice whether to announce to the work force what was happening now, or to do so later, I believed that it was necessary that everybody had as much notice as possible. This is the start of a consultation period of 90 days, followed
	by a further consultation for a month. It is right and fair that everybody knows what is happening and that is why I took the actions that I did.

Gerry Sutcliffe: Before I became an MP I used to represent Remploy workers, and I saw the special nature of Remploy factories. We lost our factory in Bradford. The hon. Member for Shipley (Philip Davies) tried to oppose that closure, as I did, and 90% of the people who were there are not in employment. If this is about consultation, as the Minister says, will she ensure, as she tracks these people, that if they do not get employment, the closure process will be stopped until a successful scheme is in place?

Esther McVey: The hon. Gentleman makes a fine point: when the factories were closed in 2008, no plans, process, tracking or special consideration were given to the workers. That is now changing. We are obviously starting from a stop-start position, because we did not have this in place previously. As each day goes by, the process becomes better and more people are in work.

George Mudie: The Minister has admitted that 812 of the 960 workers are still waiting for work in the first phase. In view of the Department’s failure to get the most vulnerable people into work, should not the Minister, if she has any heart or sensitivity, postpone any future closures until the figure falls from 812 to nothing?

Esther McVey: I take on board what the hon. Gentleman says. Those are the numbers. I also announced today, because we are working on a daily basis, that five major businesses have come on board to support ex-Remploy staff. More people are getting jobs every day, and we will help them as best we can.

Frank Roy: Can the Minister give a specific answer: why has no Remploy worker from Wishaw, whose factory was closed over the summer, been helped into a job?

Esther McVey: I will meet the hon. Gentleman, because I do not understand why none of them has been helped into a job. The offer was there for them to come forward for personal support, and it was their choice whether to do so. More people have come forward; the number was only 800 previously, but it is now up to 961. Perhaps we could work together and he could ensure that they come forward so that we can track and support them. I believe that that is just us much up to him as it is up to me, so let us work together to help those people.

Paul Blomfield: Remploy Sheffield was described by the Minister in her statement as potentially commercially viable. Does she not accept that her efforts would be better spent securing that potential, rather than risking every job in this ill-considered sell-off, and does she not see that, given the Government’s record, her talk of securing long-term employment for those disabled workers will be viewed with nothing but cynicism?

Esther McVey: When we were deciding whether to proceed with stage 2, many factors had to be taken into account. With the factories that were seen as potentially
	viable, such as those in the hon. Gentleman’s constituency, I was told that, were I to delay, they would become more vulnerable as contracts came to an end and that it was therefore imperative that we pursued stage 2 as soon as possible, because only that would ensure that the staff had a more certain future.

Ian Lavery: In the Ashington factory in my constituency, they bolted the doors, boarded the windows, ripped down the Remploy signs and cast the disabled people on to the dole queue. The promises made from the Dispatch Box for support for individuals have never materialised. Why?

Esther McVey: That support is in place and is increasing daily. If the hon. Gentleman has found that that has not been the case in his constituency, again, I ask him to meet me and the trade unions. I have met many other Members, and he is no different; as we all have the same intention, which is to get those people into work, I think that it would be best if we met up, so I make that offer to him here and now.

Paul Goggins: In spite of the tremendous efforts of the staff, and indeed increased sales, there is now a “For Sale” sign outside the Remploy factory in Wythenshawe. The Minister recently confirmed to me that only one of the 19 disabled staff who used to work there has so far been found work. Given that evidence, how can she possibly justify the closure of further factories?

Esther McVey: The right hon. Gentleman is right that 19 disabled people were employed at the factory, but in his constituency there are 16,700 people with disabilities, so we have to see what we are doing for all those people. I hope that he can take some comfort from the fact that last year alone Remploy Employment Services found jobs for 527 people with similar disabilities. Therefore, we have faith that we can get jobs for those 19 people.

Ian Lucas: The closure of these Remploy factories—I believe that they will inevitably close, just as with the closures that took place over the summer—will lead to a payment to the Minister’s Department of a capital receipt on the sale of the premises. Will she confirm that that capital receipt, which is over and above the commitment of £320 million that she mentioned, will be used for the benefit of disabled people?

Esther McVey: I will certainly look into whether the capital receipt can be ploughed into future work and support for disabled people. Equally, I would like the hon. Gentleman to take into account the fact that some of these sales are not freehold but leasehold, so the figures might not be as high as he expects.

Mark Lazarowicz: We have heard about the initiative taken by the Welsh Assembly Government. Has the Minister had a similar approach from the Scottish Government? What discussions has she had with Ministers in Scotland on trying to provide alternative employment for the many Remploy workers in Scotland who are losing their jobs, including those at the Edinburgh plant, which closed just 11 days ago?

Esther McVey: I have had many discussions with the Scottish Government about what can be put in place, and they are still coming forward with their plans. Across Scotland, 152 disabled people are employed in Remploy, but there are 668,000 disabled people in Scotland, and last year alone 2,550 disabled people were helped into work by Remploy Employment Services. So I do believe we can help, but the information that the hon. Gentleman seeks has not yet been forthcoming to me.

Bill Esterson: Given the lack of jobs and growth in the economy as a whole, is not this the worst possible time to be pushing ahead with the closure programme? If the Government are serious about supporting disabled people, surely the way to deal with this is to make sure that the jobs are there, readily available, before any closures take place.

Esther McVey: I do not recognise the statistics that the hon. Gentleman is putting forward, because since the election a record number of jobs—1.2 million—have been created in the private sector. As I said, 50,000 jobs were found by Remploy Employment Services in the past two years. We can find these jobs, and that is entirely what we are aiming to do.

William Bain: With unemployment among the disabled having risen by 63,000 in the past year, this Minister, sadly, has presided over an unmitigated shambles of a tendering process in the Springburn Remploy factory in my constituency, with nearly 50 disabled workers not even given the dignity of her making a written statement to this House. Does she not accept that with the Daily Record in Scotland having made very serious allegations about the propriety of the tendering process at that factory, the only way she can restore confidence in her own policy is to bring in a moratorium so that she does not further preside over the incompetent chaos affecting hundreds of Remploy workers across the country?

Esther McVey: It is pleasure to debate with the hon. Gentleman again. I have had two Westminster Hall debates with him on this subject, and we have spoken on various occasions. He knows only too well, from the written and verbal replies that I have given to him, what we are doing, what is happening and what has happened in his constituency.

Andy Sawford: As the great-grandson of a British soldier who lost his arm in battle but worked all his life, may I say to the Minister how important it is to our national character that we provide employment for disabled people who can work and provide support for those who cannot? Will she undertake to look into the reality gap in Corby and east Northamptonshire between her rhetoric about providing support for people to get into employment and the daily distress of being harassed by Atos and finding it incredibly difficult to find employment?

Esther McVey: We are working with and supporting these people. I am more than happy to meet the hon. Gentleman to see what is happening. However, as I have said, our main and only priority is to get all these people into work and support them as best we can.

Sheila Gilmore: The Minister’s view seems to be that we should equalise downwards and that, if some disabled people are not working while others are employed in Remploy factories, it would be better to move those in the second group into the first one, because at least then they would all be treated fairly. Given the failure to get the people affected by the first round of closures into work, surely the fairest thing to do now would be to stop, get it right and then move on. This is not about whether we should or should not try to get people into mainstream work; it is about whether we can get these people into work.

Esther McVey: Of course it is about getting these people into work. It has nothing to do with levelling down. We have taken the advice of the Sayce review and disability organisations, which have said that they want as many disabled people as possible in mainstream work. We are proceeding with that. I do not need to remind the Opposition that their failed modernisation plan, which started in 2008, was a disaster and we, as always, are picking up the pieces.

Clive Betts: Since March, neither the management nor the unions at Remploy Sheffield have received any information about, or any assistance with, securing the future of their factory. I have identified some local business people who may be interested in becoming involved. They contacted Remploy HQ, but received no reply. I have tried to set up a meeting between a local Remploy manager and these local business people, but he says that he cannot meet them, because everything has to go through KPMG. Is it not time for the Minister to start cutting through the bureaucracy and provide real assistance to people who want to become involved in trying to keep Remploy Sheffield as a going concern?

Esther McVey: Of course we are cutting through any bureaucracy. However, a process has to be fulfilled and carefully followed. The process has only just started and
	a 90-day consultation will begin in January, so those people whom the hon. Gentleman has found who might be interested in taking the factory forward should now make their case and it will be taken up by the Remploy board.

Pamela Nash: When the last round of closures was announced by the Government, I was visited by several of my constituents who worked at the nearby Remploy factory. They sat in my office and were absolutely devastated, and I tried to console them. Now we hear that hundreds more across the UK face the same fate. We also know that 90% of those who were sacked last time by the Government are still not in work. Will the Minister make it clear why 90% are not in work and, if she cannot, why she is pressing ahead with these closures?

Esther McVey: As to why the previous Government failed, that question should be put in the direction of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne). I reiterate that we are working as closely as possible with these people. We have put in place personal support and that is increasing on a daily basis. We intend to get as many of these people as possible into work.

Jim McGovern: On a point of order, Mr Speaker.

Mr Speaker: Points of order come after statements and we have a statement now, so if the hon. Gentleman is patient he may have his opportunity ere long.

Jim McGovern: It is about Remploy.

Mr Speaker: I understand that it relates to this matter, but I am afraid that the rules do not change for the circumstance.

Winterbourne View

Norman Lamb: With permission, Mr Speaker, I wish to make a statement about Winterbourne View.
	The scandal that unfolded at Winterbourne View was devastating. We were all rightly shocked, angered and dismayed by the appalling abuse uncovered by the “Panorama” programme in May 2011. Straight after the programme was aired, my predecessor, my right hon. Friend the Member for Sutton and Cheam (Paul Burstow), commissioned an in-depth review to ensure that we learned the lessons and took action. Today, I am publishing the review’s final report.
	The abuse at Winterbourne View was criminal. Staff whose job was to care for people instead routinely mistreated and abused them. Management allowed a culture of abuse to flourish. Warning signs were not picked up by health or local authorities, the residents’ families were not listened to, and the concerns raised by a whistleblower went unheeded. The fact that it took a television documentary to raise the alarm speaks volumes.
	The abuse that was uncovered at Winterbourne View is only part of the story. This case has made us look again at how we care for one of society’s most vulnerable groups. Winterbourne View hospital provided care for people with either learning disabilities or autism, together with either mental health problems or challenging behaviour. Around the country, at any one time, there are about 15,000 people with similar needs, about 7,000 of whom live with their families. Of the remainder, many live in the community, but about 3,400 are in in-patient settings. Their behaviour can sometimes pose a risk to themselves, and sometimes also to others. There will therefore be times when they require intensive treatment and support.
	However, hospitals are not where people should live. There are far too many people with learning disabilities or autism in hospital, and they are staying there for too long—sometimes for years. We should no more tolerate people being placed in inappropriate care settings than we would people receiving the wrong cancer treatment. What is necessary is nothing short of a fundamental change of culture.
	We have known for more than a decade that, with the right support, the vast majority of such people can live happy, fulfilled lives, close to their families and in their own communities. I saw that at Tower Hamlets just this morning. Much of what we know works in this area is based on the pioneering work of Professor Jim Mansell. Professor Mansell helped to set up our review and supported us right up until his death in January this year. I pay tribute to him for his tireless work in this area and for the huge contribution that he has made to improving people’s lives.
	We know what change is needed; it is now time to ensure that it happens. Today, we are setting out how we will address poor care and abuse, and ensure that excellent care becomes the norm. First, we need to send a clear message to those who provide care. Owners, boards of directors and senior managers must take responsibility for the quality and safety of their services. When they fail, they should feel the repercussions.
	A number of front-line staff at Winterbourne View rightly received criminal convictions, but the case revealed weaknesses in our ability to hold to account those who
	are higher up. We will address that. We will examine how corporate bodies and their boards of directors can be held to account under law for the provision of poor care and for any harm that is experienced by people using their services. We will also explore whether we can ensure that directors are “fit and proper persons” to oversee care, including through consideration of their record with other providers.
	We will also tighten regulation. The Care Quality Commission will include reference to the best model of care in its revised guidance about compliance, and will consider it as part of the regulation and inspection of services from April next year. The CQC will also check whether all providers are following the established national guidance or similar good practice, including by carrying out unannounced inspections involving people with learning disabilities or autism and their families. Where standards are not met, it will take enforcement action.
	Secondly, we will tackle the wider failings. We must stop people being placed in hospital inappropriately and ensure that services are commissioned which properly meet people’s needs. That requires the NHS and local government to work together.
	All current hospital placements will be reviewed by 1 June 2013, and everyone who is there inappropriately will be moved to community-based support as quickly as possible and no later than June 2014. We will also ensure that in future, health and care commissioners design services that allow people to live safely with support in their communities, with the individual and their family included in the development of their care plan. By April 2014, every area will have developed an agreed plan to ensure that that group receives high-quality care. As a result, we expect to see a dramatic reduction in hospital placements.
	The report sets out specific actions that we will take to support that high-quality care, including tackling the excessive use of physical restraint, addressing concerns about the over-use of antipsychotic and antidepressant medication, and improving safeguarding arrangements. We will support a positive and open culture in which staff provide excellent care but feel able speak out when care is poor. We will support providers to achieve that, including in relation to staff training.
	Creating a positive culture means listening to and involving people and their families. At Winterbourne View, families’ concerns were ignored. However, we must go further than heeding warnings or complaints and ensure that people and their families are involved at every stage of their care, and that they get the support they need, including advocacy support. We will make these changes as quickly as possible.
	The organisations responsible for delivering change share our commitment to making it happen and are working nationally and locally across health and social care. A concordat signed by more than 50 organisations sets out the specific actions that each organisation commits to deliver. The NHS Commissioning Board and Local Government Association will come together to lead a joint improvement programme, with financial support from the Department of Health, to ensure delivery of the changes. I will chair a programme board to oversee that progress is made.
	Winterbourne View fills us all with sorrow and anger but we are using it as a spur to make things better. Some places are already getting things right—I have
	seen some of them for myself, including at Tower Hamlets this morning, and the report discusses many more. They show what can, and should, be done for all, and that a better life for people with learning disabilities and autism is possible. I regard it as a national imperative that we transform care for those with learning disabilities or autism and behaviour that challenges, and I commend this report to the House.

Liz Kendall: I would like genuinely to thank the Minister for advanced sight of his statement and the briefing I received earlier today. Members on both sides of the House were appalled and angered by the terrible incidents at Winterbourne View, and we share a determination to ensure that all necessary steps are taken to prevent a similar tragedy happening again. Our goal must be to ensure that everyone with a learning disability or autism, including those with challenging behaviours, receives high-quality, decent and humane care and support, and that we finally end the practice of sending people to long-stay institutions, far away from their family and friends.
	The Minister has announced a number of welcome measures that are a step in the right direction, but I remain concerned that some of the proposals are not clear or strong enough to guarantee the fundamental changes that people with learning disabilities urgently need. The NHS mandate published two weeks ago states there should be
	“a substantial reduction in reliance on inpatient care.”
	Can the Minister give a figure for that reduction? Without one, that laudable aim will be open to such wide interpretation that it risks appearing meaningless. Similarly, the Government say they want every local area to provide “appropriate” care and support. Will the Minister tell the House who will define what care is “appropriate” and how that will be measured?
	How will the Minister ensure that all local commissioners have the necessary skills to make these changes? That was a problem with 150 primary care trusts, yet in future there will be 212 clinical commissioning groups. Those can, of course, draw on expertise in local councils, but the authorisation process for CCGs does not even mention learning disabilities as an area in which competence is required. If this is such an urgent national imperative for the Government, will the Minister explain why that is the case?
	Some parts of the country continue to use long-stay institutions because they have not developed alternative care in the community and at home. In a time of constrained resources, when we need to make the best use of taxpayers’ money, there should be one budget for people with learning disabilities, not separate budgets for NHS and council care. Will the Minister explain how he will make that happen on the ground? For example, will he require the NHS Commissioning Board to instruct CCGs to provide funding to local councils if they are slow to do so or if they refuse?
	The serious case review of Winterbourne View said that light-touch regulation by the Care Quality Commission was not appropriate for closed establishments, and that they should be treated as high-risk institutions, requiring frequent, unannounced probing investigations. The review says that the investigations should involve speaking
	to residents’ families and patients, and in particular to people who have left the institution, who may feel more able to speak out. The CQC recently completed a focused programme of inspections of long-stay institutions. Will that specific programme continue along the lines the serious case review recommends? Will the Government, in their review of the use of restraint, consider banning t-supine restraint, as the serious case review recommends?
	One of the most disgraceful aspects of Winterbourne View is that vulnerable people were neglected and criminally abused while the hospital’s owners, Castlebeck, charged huge fees and made huge profits. The serious case review says that Castlebeck made decisions about profitability, including shareholder returns, over and above decisions on the effective and humane delivery of treatment. The average weekly fee for residents at Winterbourne View was £3,500—the fee rose to £10,000 for one patient. The review could not determine how much of that money went back into the hospital and how much was creamed off for profit because of the company’s complex financial structure—Castlebeck is owned by private investors based in Jersey and Geneva. That has made it virtually impossible to hold the company to account. Will the Minister confirm that the company has so far failed to meet two of the serious case review’s key recommendations —that it should fund therapeutic services for all ex-Winterbourne View patients, and that it should pay for the costs of the serious case review, which have so far been borne entirely by the taxpayer?
	I welcome the Government’s commitment to examining how corporate bodies and their boards of directors can be better held to account. As a first step, will the Minister consider requiring private companies to publish the names of their owners, the members of their boards, and the details of their financial structures, before they can be licensed and registered to provide publicly funded care? The excuse that such information is too commercially sensitive should not be acceptable when the care of vulnerable people is at stake, and when it is paid for using substantial amounts of taxpayers’ money.
	How we care for the most vulnerable people is the hallmark of a decent society. I do not doubt the Government’s commitment to addressing this issue. I hope they listen to our concerns and strengthen their proposals, so that people with learning disabilities get the decent and humane care and support we would all wish for our families and friends.

Norman Lamb: I thank the shadow Minister for her contribution and appreciate the welcome she gives for the main thrust of the Government’s response. This is a moment when everybody must come together to be clear that a change of culture is necessary from top to bottom. This is not a party political issue. The culture must change, and everyone within the system—from top to bottom—must recognise their personal responsibility to achieve that.
	The shadow Minister raised a point about the mandate. One very good thing about the mandate is that it gives us accountability and transparency in the system for the future, and enables us to hold the NHS Commissioning Board and other parts of the system to account on delivering what is in it.
	The hon. Lady asked how we will measure success in relation to the reduction in numbers in long-stay institutions. There must be a focus on assessing an individual’s
	personal care needs—that is what counts. The arbitrary setting of a target on numbers would be completely inappropriate when we should be focusing on the needs of individuals. The guidance we have received is that while there are 3,400 people in in-patient facilities of one sort or another, we are talking about probably reducing that down to 300 or 400 people. That is the best assessment that has been made, but I stress again that it must be based on assessment of individual needs.
	The hon. Lady rightly makes the point about the skills of commissioners. One of the big failures has been that of commissioners to properly look after the interests of highly vulnerable people. The programme, which will be led by the Local Government Association and the NHS Commissioning Board and funded by the Department with between £2 million and £5 million of support, will be there to provide support and guidance to ensure that local commissioners get this right. We should applaud the parts of the country where this is being done brilliantly at the moment. They can demonstrate best practice to areas that need to change.
	The hon. Lady asked whether the Commissioning Board will hold CCGs to account. The answer is, absolutely. This is part of the transparency of the new system and they must deliver on what they will be required to do.
	I agree with what the hon. Lady said about the budget. The report makes it clear that the starting point should be that pooled budgets are the appropriate way forward. This is patchy at the moment. If there are not pooled budgets, they should explain why. In my view, there is no good justification for not pooling the resources of the NHS and social care to ensure the best and most appropriate care for individuals. There is also a duty for the two sides—social care and NHS—to work together. The health and wellbeing boards help to bring to them together, and that is valuable.
	The hon. Lady asked about Care Quality Commission inspections. Unannounced visits will continue, and they will include people with learning disabilities and their families, so that their perspective is gained. This is not a time-limited programme—it will continue. I think that the CQC recognises that this is an area that requires focus because of the vulnerability of the individuals concerned.
	On physical restraint, we will look at all elements, including those mentioned by the hon. Lady, so that the best possible guidance is given to ensure that the excessive use of restraint, which currently happens in too many places, comes to an end.
	On Castlebeck, I absolutely agree that it should consider financial support for the costs incurred following the scandals uncovered in its care settings. The hon. Lady rightly points out the responsibility that goes with charging an average of £3,500 per week, per patient. One of the great failures of the current system is that there is not sufficient corporate accountability to ensure that people are held to account when things go wrong. When we consider proposals to address that lack of corporate accountability, we will look at the hon. Lady’s transparency proposal on publishing a lot more information about financial structures. Indeed, in the consultation we announced a fortnight ago on the follow-up to Southern Cross, we are proposing that there should be transparency regarding financial structures and that that information is shared to ensure that we avoid being caught by surprise, which is what happened under the system in operation when Southern Cross crashed, leaving many people in an unacceptable state of anxiety.

Jack Lopresti: May we have an assurance, first, that local agencies, such as the police and local government, have to take a large chunk of responsibility for this situation occurring in the first place and, secondly, that there will never be a repeat of the situation where the local council can fail to pick up on up to 40 alerts over several years? That could have avoided much of the pain and suffering at Winterbourne View.

Norman Lamb: I agree absolutely. One of the great scandals of this whole saga has been the extent to which local authorities and primary care trusts let people down. The father of a patient at Winterbourne View told me how the concerns he raised were ignored, how he watched as his son became more zombie-like because of the use of antipsychotic drugs and how he felt guilty himself—how shocking that a parent ends up feeling guilty through no fault of his own. He was powerless to do anything. It is shocking that public authorities let people down in that way. That is why I say that everyone in the system has to step up to the plate and recognise the need for a complete change of culture to recognise that everyone with learning disabilities has exactly the same rights as the rest of us.

Grahame Morris: I thank the Minister for his statement and hope that he will reflect on some of the questions posed by my hon. Friend the Member for Leicester West (Liz Kendall), who made a powerful case for private providers being subject to freedom of information requests—I draw his attention to early-day motion 773, which embodies that principle.
	On the failings that brought about this terrible tragedy, the Care Quality Commission was overly concentrating on process rather than its main job of ensuring that the required standards were met and looking at quality and risk profiles. There was a big disconnect between the perceptions of carers and families and the views of the CQC. Fundamentally, unless we address the lack of resources, will we not see a series of these disasters in the future?

Norman Lamb: In the aftermath of Southern Cross, we have seen the need for much greater transparency in these large corporate bodies to ensure that we know exactly what their financial structures are like and where the risk exists. The hon. Gentleman mentioned funding. The great scandal is that we are spending vast sums of public money putting people at risk and into inappropriate care settings. Visiting places such as Tower Hamlets, we discover that the right care package for individuals—most often, supported living in their own community—is much cheaper and gives them a quality of life they never experienced in these institutions. This is not about money, therefore, but about the system stepping up to the plate and ensuring that individuals are respected in their own right.

Paul Burstow: The Minister is absolutely right that transparency is essential, but there is also a recognition—I think—that that is not sufficient; accountability is essential as well. In this case, the company, Castlebeck, has hidden in the shadows and left everyone else to take the blame. I welcome what he has said about corporate responsibility, therefore, but I urge him—and commend to him—to make a
	much closer examination of the corporate legal framework to ensure that there is a corporate legal offence. It is not good enough for the thugs who did this to be in the dock and receive a criminal conviction; the company itself has a criminal responsibility, and it should be held to that standard and brought to court as well.

Norman Lamb: I commend my right hon. Friend for the work he did on this subject. When I started this job, it struck me that there was an absence of effective corporate accountability in the law and that that had to be addressed. I was determined to ensure that the Government response addressed that issue head on. In doing that, we need to look both at the regulatory framework—issues such as whether there could be a fit-and-proper persons test for those on the boards of companies—and at the criminal law. It is striking that in the Winterbourne View case the authorities determined that it was not possible, under existing law, to bring prosecutions. I am absolutely clear, however, that responsibility rests at the top of the company for facilitating this sort of outrage. That is why the law needs to change. We need to look both at criminal offences and the regulatory framework.

Barry Sheerman: May I press the Minister on one aspect? Will he look much more closely at the role of the third sector, particularly charities, in providing services? Hollybank school and community in Mirfield in west Yorkshire, close to my constituency, does a brilliant job. Does he recognise that, in considering the report, it is the quality of management that one worries about and the fact that the most vulnerable people in our society are so often looked after by poorly trained people on the minimum wage working 12-hour shifts? That is often at the heart of the problem.

Norman Lamb: I thank the hon. Gentleman for that question and completely agree that we have to address the issue of skills. It is worth pointing out that there are some fantastic providers in the voluntary sector, and in the private sector as well. We should applaud that and recognise that there are many well trained people on low wages providing a fantastic quality of care, but there are also places where that is not the case. That needs to be addressed.
	I absolutely agree with the hon. Gentleman that we should look closely at the voluntary or not-for-profit sector. I had a meeting recently with the head of Shared Lives, an organisation that places people with learning disabilities into people’s homes. Surprise, surprise—when people are treated with dignity and treated as human beings, their behaviour improves and sometimes all the complex problems subside. There is an awful lot we can do. In the new year I will bring together the providers of the best care available so that we can learn the lessons from them.

Tony Baldry: As patients had come from different parts of the country to Winterbourne, there was a sense that they had got lost in that locality. Whatever happens, it is a tragedy that it took a television programme to discover all this. We are now going to have health and wellbeing boards and HealthWatch.
	Can my hon. Friend tell the House how, between them, they can ensure that they inspect and have a grip to ensure that something like this never happens in my county of Oxfordshire? It has never happened there because the structures of local government and health and social services are constantly monitoring and inspecting whatever is happening in our areas, irrespective of whether they are delivering health or social care.

Norman Lamb: I thank my hon. Friend for his question. He is absolutely right. The new structure provides far greater local accountability than we have ever had. One of my great criticisms of the old primary care trusts is that they are, in effect, completely unaccountable to their local communities. Health and wellbeing boards scrutinising what clinical commissioning groups and the local authority are doing can be very powerful. He also mentioned HealthWatch. Like its predecessor organisations, the local involvement networks or LINks, it will have the power to go into all care and health settings and inspect what is going on, often behind closed doors. We encourage HealthWatch to use those powers to shine a light on what is happening in some of those places.

Helen Jones: The Minister has rightly referred to the amount of money paid for patients in Winterbourne View, but does he also recognise that good-quality care in a community is also expensive and requires a lot of highly trained staff? Given the cuts to local authority budgets, is he convinced that sufficient resources are available, even if budgets are pooled? When he knows how many patients need to be transferred back into the community, will he commit to come to the House to make a statement on whether the right resources are available?

Norman Lamb: I thank the hon. Lady for that question. What was striking when I visited Tower Hamlets this morning and talked to the leaders on the health and local authority sides was that, despite being the third most deprived borough in the country, Tower Hamlets is one of the lower spenders on institutional care because it is doing things the right way. Tower Hamlets has not referred a single person from the borough to an assessment and treatment centre for three whole years. Tower Hamlets has demonstrated not only that that is possible, but that it often ends up costing much less to provide the right care in the community—[ Interruption. ] Well, that is what the borough leaders find. That is what I have been told by them and by many other people in the sector. An individual should have the care that they need, and if the cost of that package in the community is substantial, it should be met. We should never compromise on that. All I am saying is that the overall cost of providing the right kind of care in the community often looks lower, when compared with those institutions in which the cost is extraordinarily high—as much as £3,500 per week per patient.

Rehman Chishti: The Minister mentioned unannounced inspections. Will they involve speaking at random to patients at the centres? Linked to that point, some hospitals around the country have a whistleblower policy that allows people who work in them and others to take their concerns to senior officials in confidence.

Norman Lamb: I thank my hon. Friend for his question. I am quite sure that those inspections will involve talking to the people in those settings. The fact that the Care Quality Commission is saying that it will involve people with learning disabilities and their families in those inspections will help to ensure that they have a human face. My hon. Friend also mentioned whistleblowing. It is essential that individuals feel able to blow the whistle when they see examples of abuse or neglect. Indeed, the Government have funded a helpline for any whistleblower in either the health or the care setting to ensure that people can always get access to guidance on how to go through the proper process of blowing the whistle on unacceptable standards of care.

John Healey: I welcome many of the steps that the Minister has announced today in response to the shameful scandal at Winterbourne View. He says that he wants those who are high up in the organisations to be held to account. Does he therefore accept the argument put forward by my hon. Friend the Member for Leicester West (Liz Kendall) that now is the time to regulate for the best business standards, as well as for the best care standards? He also says that he wants to use regulation to secure higher and tighter standards. Will he ensure that, in putting those standards in place, any regulation of physical restraint deals not only with the excessive use of such restraint but with the appropriate use of the best techniques and with the best training?

Norman Lamb: I thank the right hon. Gentleman for his welcome for the broad thrust of my proposals, and for his questions. On standards of business in the sector, it strikes me that the levels of corporate accountability seem to be significantly lower in this sector than in many others. How bizarre is that, in a sector in which the protection of individuals is absolutely vital? In our response to Southern Cross and to this case, we will require owners to adopt a much more transparent approach and to disclose details of their financing arrangements. We are introducing that level of engagement and transparency as well as addressing the need for accountability. The right hon. Gentleman also asked about restraint, and we will certainly look at the appropriate methods of restraint. It should really only be used for the protection and safety of an individual or of others. It should not be used for chastisement or punishment, as appears to have been the case in some locations. That is completely unacceptable.

John Pugh: One of the big problems is the fact that many local authorities house vulnerable people at a considerable distance from their families. What element of the proposals will constrain that unfortunate practice?

Norman Lamb: I thank my hon. Friend for that question. He is absolutely right that one thing uncovered, both at Winterbourne View and in the Care Quality Commission survey of similar institutions, was that people were sometimes placed hundreds of miles away from their families. That still continues; that is what we have to address. My hon. Friend asks about what in the proposals will address that and ensure that it does not happen. Every part of the system is signed up through the concordat to changing what has been an unacceptable
	practice. People will be held to account. I said in my statement that I will chair a programme board throughout this period of change, and we will publish regular updates so we can, in a sense, hold to account every primary care trust or clinical commissioning group and every local authority that fails to change in the way expected.

Tom Clarke: I welcome the Minister’s pledge—made twice during his statement—that the Government will go ahead with a review of those “inappropriately placed” and to make it available by 2014. Will there be any element of advocacy during the review, including that endorsed under the Disabled Persons (Services, Consultation and Representation) Act 1986? Finally, do the Government think it possible—if not by this means, by other means—to consider the fairly large number of people inappropriately placed in prison?

Norman Lamb: I thank the right hon. Gentleman for his important questions. First, we want to ensure that advocacy is available to help those families and individuals, ensuring that they are placed in appropriate settings and away from these long-stay institutions that we all find completely unacceptable. I very much agree with him on that, and I find myself in agreement with him again on prisons. We shall come forward next year with some clearer proposals on approaches to diversion—assessing someone’s needs before they end up in prison, diverting them, if at all possible, to much more appropriate settings.

Andrew Selous: I was not sure I heard the Minister correctly when he said that the average fee was £3,500 a week, which is £182,000 a year. Is it not possible to pay some of the caring staff slightly more and demand not only the highest level of skills, but the highest level of compassion for that level of fee from the state?

Norman Lamb: I thank my hon. Friend for that question. He is absolutely right that an extraordinarily high sum was being paid to put people at risk of abuse —and to be abused, as it turned out in Winterbourne View. Pay rates are not ultimately the responsibility of Government, but one would hope that responsible organisations would look to train their staff to a high standard—that is absolutely a prerequisite and they will be held to account by the Care Quality Commission for proper training—and, wherever possible, to provide better pay rates so as to ensure that people are rewarded for the incredibly important work in our care sector.

Anne McGuire: Before I became an MP, I worked with parents of learning disabled adults to establish supported community care homes, as those parents would have done anything rather than allow their adult children to go into institutional care. I welcome the Minister’s comments today. There is an emphasis on process, which is important, but does he agree that there is a challenge in the wider cultural sense? As long as we do not give those with learning disabilities the respect to which they are entitled as equal members of society, we almost create an environment in which people think they can with impunity do the sort of things they did in Winterbourne. Will the Minister
	work with the Minister for Disabled People, the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey) and look at how we can challenge those attitudes, which are sadly still around in the 21st century?

Norman Lamb: I thank the right hon. Lady for that. She is absolutely right in what she says about institutional care. I keep mentioning Tower Hamlets, as it was rather inspirational to visit and see how things are done there. I was told that Tower Hamlets has one of the lowest rates of children going into care because of the support for families that it provides, preventing that from ever being necessary.
	As for the right hon. Lady’s second point, she is absolutely right: this a moment that demands a change of culture, not just in the health and care system but in society as a whole. There must be a change in all our attitudes. We will make progress only if we understand the fundamental point that someone with learning disabilities has exactly the same rights as anyone else, and should be treated with dignity and respect.

Glyn Davies: We are for ever reading in reports such as this about poor behaviour in social care. In the last year or so, we have had Southern Cross and then Winterbourne View, which is probably the most shocking example of all. We greatly welcome the measures that the Minister has announced, but can he tell us what arrangements exist to enable us to share the knowledge that we have gained and the lessons that we are learning with the Welsh Government? I am sure that there are very good examples that we can pass over Offa’s Dyke, and that Wales has very good examples from which we can learn.

Norman Lamb: I know that some people from Wales were placed in Winterbourne View. This issue is important and relevant to Wales, Scotland, England and Northern Ireland. I would encourage officials of the devolved Administrations and the United Kingdom Government to liaise closely in order to ensure that the lessons that we are learning here can be applied elsewhere, and that good lessons from Wales and elsewhere can be learnt in England.

George Mudie: The Minister is a very humane man, and I entirely accept the fine things that are in the report. However, we are ultimately responsible
	for the proper treatment of vulnerable people, both in hospitals and in care homes, and fine words go only halfway. We have seen people in that sector take advantage of and abuse vulnerable people who cannot speak or fight back.
	One of the key points raised by my hon. Friend the Member for Leicester West (Liz Kendall) concerned unannounced inspections, which the Minister seemed to suggest were a matter for local authorities or other public bodies. Can he tell us whether real resources will be put into that part of the operation? Whatever has been signed up to, vulnerable people have been treated so badly that we should be ashamed. If we do not provide resources that will enable us to know that someone independent has the power to enter premises at any time or on any day and inspect the treatment of vulnerable people who are in our care, we cannot be taking this issue seriously.

Norman Lamb: Let me respond first to the hon. Gentleman’s observation about fine words by saying that this is just the starting point. It does not do the job; it merely sets out the scale of the ambition that is necessary to address a national scandal. It is good that all parts of the system are signed up to it, because that gives it a better chance of success. I will chair a national programme board that will keep a close watch on what goes on and hold every part of the system to account.
	The hon. Gentleman spoke of the horrors of what goes on in some care homes and in hospitals, but we must remember the horror of family members who went to local authorities or the NHS to complain and were ignored. That, in a way, is just as scandalous, and it must be addressed.
	I have talked to the chief executive of the Care Quality Commission, David Bearn, who has confirmed that he has enough resources to maintain a programme of unannounced inspections. They will continue; they must continue, and they must include people with learning disabilities and their families. I mentioned the role of HealthWatch earlier. In every local area, its representatives will have the power to go into these places to see for themselves what is going on behind closed doors. That too will introduce a new accountability.
	The final point I would make is that we are developing the idea of online quality indicators for every care and health setting, with user reviews so that individuals who have been in those care settings and their families can give their views. That scale of transparency can be transformational in driving up standards.

Point of Order

Jim McGovern: On a point of order, Mr Deputy Speaker. First, may I apologise for jumping the gun earlier? You were not in the Chair at the time, but I had not realised there was a statement to follow the two urgent questions, and as my point of order is about Remploy, I wanted to give the Minister concerned, the hon. Member for Wirral West (Esther McVey), who was present at that time, the opportunity to respond.
	I seek your guidance, Mr Deputy Speaker. Last Tuesday afternoon I attended a Westminster Hall debate on Remploy, and I invited the Minister to come to Dundee to see the magnificent work being done by the work force at the Remploy factory in the city. The Minister stood up, cheerily smiling, as is her disposition, and accepted the invitation, saying she would happily come to Dundee. The Dundee press picked up on that and covered it the next day, and the Remploy work force took it as suggesting positive news for their factory.
	However, 24 hours later the Minister announced that the Dundee factory would be closing. It beggars belief that she did not know on Tuesday what she was going to announce on Thursday. I have my own views on the morality of that, but was she guilty of breaching any procedural protocol either by misleading Parliament or withholding information that should have been made known to me? She could have said, “I’ll meet you privately after this debate,” or “There will be a statement on Thursday.” There were numerous ways in which she could have let me know that news, but when we learned the news on Thursday it came as a bombshell to me and the work force.

Nigel Evans: I thank the hon. Gentleman for apologising for jumping the gun before the statement and also thank him for the point of order. It is not for the Chair to make a judgment on the question he has asked. I know he is passionate about this issue, and that he attended the Westminster Hall debate he mentioned and the urgent question on Remploy that the Speaker allowed today. There will be other opportunities for him to raise this issue with Ministers in the coming days and weeks. He knows the devices that are available to him, and he has put his discontent on the record.

Financial Services Bill (Money) (No. 2)

Qu een’s  recommendation signified.
	Resolved,
	That, for the purposes of any Act resulting from the Financial Services Bill, it is expedient to authorise the payment out of the Consolidated Fund of any increase attributable to the Act in the expenditure which in urgent cases is payable out of that Fund under the Banking Act 2009.—(Greg Clark.)

Financial Services Bill (Ways and Means)

Motion made, and Question proposed,
	That, for the purposes of any Act resulting from the Financial Services Bill, it is expedient to authorise the payment into the Consolidated Fund of sums in respect of penalties imposed under the Financial Services and Markets Act 2000 or the Banking Act 2009.—(Greg Clark.)

Christopher Leslie: I am conscious that time is moving on apace, but I have a quick question for the Minister. Under this motion, the destination of proceeds arising from fines imposed on financial services companies will henceforth not solely be the financial service regulators; it will also be the Consolidated Fund. What proportion of fines will still go to the regulators and what proportion will go to the Consolidated Fund, and is there a note on the methodology by which the regulators calculate the level of these fines? Barclays was fined almost £60 million for the LIBOR scandal in the summer, but there are issues in respect of how fines are set. Some £150 million has been levied so far this year, and it is understandable that these sums ought to come into the wider public purse, but will the Minister briefly say how that will happen?

Greg Clark: I am grateful for the chance to explain that. There is not a formula, because the funds that come to the Exchequer are net of the enforcement costs the Financial Services Authority incurs. In any given year, things would depend on what has been spent and what revenues come in, therefore.
	Question put and agreed to.

Financial Services Bill (Programme) (No. 4)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),
	That the following provisions shall apply to the Financial Services Bill for the purpose of supplementing the Orders of 6 February, 21 February and 23 April 2012 (Financial Services Bill (Programme), Financial Services Bill (Programme) (No. 2) and Financial Services Bill (Programme) (No. 3)):
	Consideration of Lords Amendments
	1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion at 10.00 pm.
	2. The proceedings shall be taken in the order shown in the first column of the following Table.
	3. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
	
		
			 TABLE 
			  Lords Amendments  Time for conclusion of proceedings 
			  Nos. 1 to 23  7.00 pm 
			  Nos. 24 to 58  8.45 pm 
			  Nos. 59 to 290  10.00 pm 
		
	
	Subsequent stages
	4. Any further Message from the Lords may be considered forthwith without any Question being put.
	5. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Greg Clark.)
	Question agreed to.

Financial Services Bill

Consideration of Lords  amendments

Nigel Evans: I must draw the House’s attention to the fact that financial privilege is involved in Lords amendments 122, 125 to 128, 138 to 140, 146, 182 and 203. If the House agrees to them, I shall ensure that the appropriate entry is made in the Journal.

Clause 1
	 — 
	Deputy Governors

Greg Clark: I beg to move, That this House agrees with Lords amendment 1.

Nigel Evans: With this it will be convenient to consider the following:
	Lords amendment 2.
	Lords amendment 3, and amendments (a) and (b) thereto.
	Lords amendments 4 to 15.
	Lords amendment 16, and amendment (a) thereto.
	Lords amendments 17 to 21 and 148 to 178.

Greg Clark: It is a pleasure to be muscling in at this late stage of our proceedings on the Bill, but I feel it is a bit of a cheek to do so given that many Members have laboured many hours over these clauses in Committee—

Christopher Leslie: indicated  assent .

Greg Clark: The hon. Gentleman was one such Member.
	We are in agreement with all their lordships’ amendments, and this first group demonstrates that the Government have listened to Parliament’s concerns and have amended the Bill accordingly.
	The governance of the Bank of England was one area of concern, and it was debated at length in this place and the other place. The Government agreed that the Bank’s expanded responsibilities warranted taking another look at its governance arrangements. The Treasury Committee produced an excellent report on this subject just over a year ago—I note that the Committee Chairman, my hon. Friend the Member for Chichester (Mr Tyrie), is present—recommending that the Bank’s non-executive directors be given a greater role in scrutinising the Bank’s work, including the ability to commission and publish reviews of the Bank’s performance.
	The current version of the Bank of England Act 1998 does not actually describe the non-executive directors as non-executive, but various amendments before us in this group will finally clarify the terminology in respect of the Bank’s court of directors by distinguishing explicitly between the non-executive and executive members.
	On more substantive governance matters, amendments 3, 6 to 9, 148, 149, 151, 152, 154, 155, 169, 172 and 173 fulfil the substance of the Treasury Committee’s recommendations in this area via the creation of a powerful new oversight
	committee made up of the non-executive directors of the Bank’s court of directors. The oversight committee’s remit covers the entirety of the Bank’s objectives and strategy. This remit is already broad enough to allow the oversight committee to look at any aspect of the Bank’s work it believes appropriate to examine, including the effectiveness of its crisis management co-ordination with the Treasury, as suggested in an amendment proposed by the hon. Member for Nottingham East (Chris Leslie). I am sure he will comment on that.
	The oversight committee will have a statutory right to access the meetings and papers of the Financial Policy Committee and the Monetary Policy Committee, and it will have the power to commission reviews of the Bank’s performance from external experts or from the Bank’s own policy makers, and publish the reviews and monitor the Bank’s response to them. In line with the Treasury Committee report, these performance reviews will be undertaken retrospectively. The Committee recommended that they should take place at least a year after the period to be reviewed, in order to avoid second-guessing at the time of the policy decision. Just to be absolutely clear, the oversight committee’s remit to review the Bank’s performance is limited to the Bank’s objectives and strategy only; it does not extend to the Prudential Regulation Authority. The only role of the oversight committee in respect of the PRA is to determine the remuneration of the members of the PRA board. Because the PRA will be operationally independent in carrying out its statutory functions of regulation, it will be directly accountable to Parliament. The Government expect that the Treasury Committee will wish to summon the senior PRA executives and, where necessary, the non-executives to account for the PRA’s actions.
	Amendment 167 will require the court of directors to publish a record of each of its meetings, fulfilling another of the Treasury Committee’s recommendations from its report. We have also listened to concerns in respect of the Financial Policy Committee, which focused on the role of economic growth in its decision making and the balance of its membership. Amendment 10 gives the FPC a secondary objective to support the Government’s economic policies, including growth, which will sit alongside existing requirements, such the brake on the FPC taking action that would damage long-term sustainable growth. Amendments 4, 5, 150, 156 and 157 aim to rebalance the FPC by removing one of the Bank members, leaving a voting membership of 10 people—five Bank members and five non-Bank members.
	Amendments 16, 17 and 19 to 21 go further to increase the transparency and accountability of the FPC. The FPC will be required to prepare an explanation of each of its actions, setting out publicly the reasons for its decision to take the action and its reasons for believing that the action is compatible with the FPC’s objectives, including to contribute to economic growth, and the various factors to which it must have regard, including proportionality. The FPC is also required to include an estimate of the costs and benefits of the action, where it is reasonably practicable to do so.
	Amendment 17 requires the FPC to review the decisions that it has already taken in order to consider whether the actions are still necessary, or whether they should be revoked or removed. That will help to ensure that the FPC’s directions and recommendations do not remain
	in place for any longer than is necessary. The FPC must publish the explanations of its actions and a summary of its reviews in the next financial stability report.
	The remainder of the amendments in this group represent further agreements made in the House of Lords in response to points raised in debate. Amendment 168 makes it absolutely clear that the Chancellor must always appoint a non-executive member of the court to be its chair. Amendments 174 to 176 continue the immunities from liability for damages that the existing regulators have and extends them to the new regulators. The Government have made amendments in the House of Lords to ensure that if the PRA or FCA commissions the other regulator, or the Bank of England, to carry out an investigation or produce a formal report on its behalf, the body that has been commissioned is also covered by the immunity.
	This group of amendments represents a significant package of changes to the legislative framework for the Bank and the FPC, in response to points raised both in this House and in the House of Lords, and I commend them to this House.

Christopher Leslie: It is a great pleasure to welcome the new Minister to these rather long-winded proceedings. I believe we started on this Bill back in February, but he should not worry, as this is shortly to be followed by the banking reform Bill and possibly even a banking standards Bill—to be determined—so we will probably have plenty more opportunities to chew over these issues then. It is a little preposterous to have a knife coming down at 7 o’clock, by which time we have to put the Question on 150 or so of these Lords amendments. That gives us about 25 seconds per amendment [Interruption.] I will get on with it; I lost about a dozen amendments just then.
	That is why we have tabled several amendments to those Lords amendments—you will be impressed with that, Mr Deputy Speaker—and I wish briefly to explain why we have done so. The first Lords amendment that we are seeking to amend is Lords amendment 3, which, as all hon. Members here know, deals with the creation of an oversight committee within the Bank of England as a sort of subset of the court of directors, where it is to have a reviewing and, supposedly, a scrutinising role. There is a problem: the oversight committee has a series of responsibilities, not one of which is set out, in overseeing what the Bank of England does. The committee has a set of responsibilities to monitor, to review procedures and to conduct performance reviews, but all of that is retrospective—it looks backwards, not forwards. May I gently suggest to the Minister that it might be more appropriate if he were to call this a “hindsight committee” rather than an oversight committee, because as things stand I do not think there is a sense in which this is a proper check and balance within the governance of the Bank of England?
	Why does that matter? It matters because the Government are giving phenomenal new powers to the Bank of England within our economy as an overarching financial regulator. The Minister says that the PRA is independent and will report to Parliament, but let us be honest: this is a creature of the Bank of England and the Bank will control very much what happens in the regulatory framework. Although we welcome the concession that was made to create an oversight committee, people
	have misgivings—we will probably hear about some of them, perhaps from members of the Treasury Committee, in a moment—that there is still a very hierarchical and centralised set of governance structures in the Bank of England.
	We therefore need to make sure that this crucial verb “oversee” is included in the oversight committee’s remit. That would help to shift the balance of power between non-executives and executives in the Bank of England framework just that bit more. These are important lessons of governance, certainly from the private sector. While we are moving towards that executive and non-executive balance, it is important that we recognise that the Bank of England is being dragged into the 21st century. If we are taking the opportunity to do that in legislation, making that particular change would be very welcome.
	The other amendment we wish to make to Lords amendment 3 relates to crisis management. As I said, the Bill gives massive new powers to the Bank of England, but in a crisis there will be very little time to figure out and design standing orders, or to work out arrangements for who will meet whom and for how decisions can involve the right people. You will recall, Mr Deputy Speaker, how during the global financial crisis crucial decisions affecting billions of pounds of taxpayers’ money and whether people could access the cash machines were made in the space of hours over weekends. In hindsight, it would have been nice to have had a carefully planned set of arrangements, and this legislation needs to learn the lessons from that. We are concerned that the crisis management arrangements are still thin and inadequate. We have suggested that if there is going to be an oversight committee in the Bank of England, the Bill needs to set out explicitly that it is to have a duty to ensure the adequacy and effectiveness of arrangements with the Treasury for crisis management.
	There is no role for the new financial conduct authority in the drafting of the arrangements. Apparently it does have a veto, but it is not part of the drafting of that memorandum of understanding. The Government are still resisting proposals to ensure that deputy governors and the chief executive of the FCA can consult directly with the Treasury in circumstances where there might be differences of opinion. Given the import and the size of the FCA, the PRA and the FPC within the Bank, it is important that the deputy governors have an ability and a right to talk to the Treasury, so that everything is not hidden and suppressed within one view of the Governor of the Bank of the England.
	There is a very bizarre set of provisions excluding the ability of the memorandum of understanding to make provision about the relationship between the Bank of England and the PRA, which goes to prove that the PRA is very much a creature of the Bank. It also suggests that the Governor will have powers to suppress the voice of the PRA in a crisis. Shockingly, there is no parliamentary approval process for that MOU; no statutory instrument arrangement has been made, as I understand it. The crucial paragraph of the MOU that deals with what happens in the white heat of an emergency simply says, “Oh well, there will be ad hoc or standing committees just to sort these things out.”
	That is not good enough. The whole of best practice in preparedness and in emergency and contingency planning would suggest that now is the time for Her Majesty’s Treasury and the Bank of England to sit down, and calmly and methodically work through what would happen in those circumstances. There should be some draft standing orders to pre-empt those scenarios.

Andrew Tyrie: The hon. Gentleman will recall, of course, that the poorly drafted MOU that lay behind the tripartite agreement certainly played a role in the lack of understanding of how to handle the crisis. Does that not point all the more towards a need to think things through very carefully now? That MOU was scrutinised in Parliament; I was in Committee at that time and most of the points made were largely ignored. Surely now, while we have the time, we should think through what is required in such an MOU and take the opportunity to consider that in Parliament.

Christopher Leslie: I entirely agree with the Chairman of the Treasury Committee, who is very knowledgeable and has some strong views on these questions. It is a pity that when we flick through the luminous list of Lords amendments, we find a gaping hole on those crisis management arrangements, where none was accepted by the Government. Some clauses in the Bill deal with that set of scenarios, and it is noticeable that such provision is not included there. That is in part why we have sought to amend Lords amendment 3, as one of the few areas where we can make an amendment is in respect of the role and duties of the oversight committee. I accept that that is only half of the scenario, as we also want Her Majesty’s Treasury to have a process for reviewing the adequacy and effectiveness of its arrangements with the Bank of England, but we do not have the opportunity today to propose such an amendment.
	If we are to have an oversight committee, it should be able to play a role in ensuring that the crisis management arrangements are up to scratch and that there is joined-up thinking between these variously important branches of governance to ensure that someone at the Bank of England is tasked with thinking these things through very carefully.

Alison McGovern: Does my hon. Friend agree that it is incredibly important that Parliament gives its view on such issues, given the weight of academic insight into the arrangements in place at the time of the crash? We are trying to learn some of the lessons from that, and one of the key lessons is the importance of rules and thinking them through ahead of the scenarios, since it is literally impossible to know what the next unforeseen shock might be and where it might come from.

Christopher Leslie: My hon. Friend is correct that this is about learning the lessons of preparedness and of what level of forward thinking we can undertake at this point in time. It is still amazing—I know she agrees—that although the FSA conducted a comprehensive review of its role in the financial crisis and the Treasury and Government did the same, we have to this day still not had a comprehensive review by the Bank of England of its role in the financial crisis. That is amazing. It begrudgingly had three minor reviews dragged out of
	it—it was like getting blood out of a stone—considering small particular areas where it had some failings. Those reviews concluded that there were serious issues to be addressed, and one of the individuals conducting one of those three small arrangements talked about the fact that the governance arrangements in the Bank of England were still too centralised. I hope that the Government will think more carefully about crisis management provisions.

Alison McGovern: I thank my hon. Friend for being so generous in giving way again. This is a crucial point: Parliament rarely discusses the strategic role of the Bank of England and rarely legislates, in part because the independence of the Bank of England is still a valid economic principle on which we hope to rebuild our economy. We must therefore get the discussion right at this time.

Christopher Leslie: It is worth noting that when we talk about the independence of the Bank of England we are talking about operational decisions of the Monetary Policy Committee. They have to be made, of course, without political interference. We can come on to the questions of quantitative easing and the Chancellor’s recent decisions on that, but we will put them to one side for now. The questions of governance of the Bank of England are a matter for Parliament to take very seriously indeed.
	As the debate progresses, we will discuss the vast powers that the Bank will be taking, which are known rather opaquely as macro-prudential powers of regulation. Essentially, the Bank of England can intervene in any number of financial services, products and transactions and affect the financial well-being of businesses, consumers and households in the constituency of my hon. Friend the Member for Wirral South (Alison McGovern). We are talking about mortgages, lines of credit and supply and so on. That is why we need to get the arrangements right, and it is a shame that the Government did not do that.
	I want to skip on, if I may, to Lords amendment 16, to which we have suggested another small amendment.

Gareth Thomas: While my hon. Friend has his arguments firmly in his mind, for some time many Members of this House have been concerned that the Bank of England has not done enough to encourage our high street banks to invest in deprived communities. Does he think that his amendment to Lords amendment 3 might help to encourage the Bank of England to pay a little more regard to those concerns?

Christopher Leslie: Indeed, and I am grateful to my hon. Friend for taking the time to participate in this debate. A string of amendments that we will discuss later cover consumer credit and the interests of consumers, and we will talk about ease of access to financial services when we consider them. He is right, as the Bank of England is a key player in this regard.
	That point neatly takes me on to our amendment (a) to Lords amendment 16. It tries to ensure that under the new arrangements the Bank of England—in particular, the new powerful committee that is being established,
	called the Financial Policy Committee—will, when it explains the decisions it is taking, also have to include an assessment of the impact of its decisions on economic growth. I know that the whole question of jobs and growth is somewhat of a blind spot for Treasury Ministers, but notwithstanding their rather peculiar inability to see the importance of these issues, we feel that it is important to put that requirement in the Bill.
	We are delighted and overjoyed that the Government finally relented and granted a concession in the other place, after months of labour in Committee in this place, by agreeing to Lords amendment 10. It was a major victory for the Opposition when the Government were forced to change the Bill to ensure that the FPC would not only contribute to the financial stability objective but, subject to that, support the economic policies of Her Majesty’s Government, including their objectives for growth and employment. That concession was made because of the amendments we tabled and the evidence heard in Committee from a wide number of organisations, including the British Bankers Association, the CBI, the London stock exchange and others. They all said in submissions to Parliament that the new regulators should have regard to growth, so we are glad that the FPC has that general backstop requirement on its shoulders. However, we do not think it goes far enough.
	As I said earlier, the powers the Bank of England will take—that rather opaquely described set of macro-prudential tools—will be very wide ranging. Each time it pulls one of those levers, each time it makes a particular decision, it should explain the impact of that change. The Bank of England will be able to affect a number of key areas. Perhaps the Minister will tell us when the draft order at the back of the Treasury’s consultation document is likely to find its way on to the Floor of the House for debate, because I know that a number of hon. Members will be interested in that.
	The Bank will have powers called counter-cyclical capital buffers. I know that the Treasury Bench has a difficulty with the concept of counter-cyclicality, but it essentially means that banks will be required to build up capital when times are rather exuberant and things are going well in the economy, but to unwind those capital buffers in a downturn. The Bank will say that there should be sectoral capital requirements. In other words, the FPC can make the residential mortgage sector have a certain amount of capital or structure its business in a particular way. The commercial property sector will have to do the same. This is a Bank of England decision, not the result of parliamentary or legislative changes. Consumer credit decisions will be made. If my hon. Friends have constituents who pay off their credit card, perhaps currently a 2% or 5% minimum repayment on a monthly basis, at the flick of a switch the Bank of England will be able to say, “No, you have to pay off 10% each month,” or perhaps even more. That is the sort of power that the Bank of England will have.

George Mudie: The situation with mortgages will be similar. I am certain that the FSA’s and the Bank’s insistence on a higher deposit will harm the construction industry. The average price of a two or three-bedroom house is £160,000, and 10% of that is £16,000 and 20% £32,000. We are getting more and more tales of young couples who simply cannot get on to the housing ladder because they are paying excessive rents and cannot save that deposit.

Christopher Leslie: My hon. Friend will not be surprised to learn that there was a little argy-bargy between the Treasury and the Bank of England. As I understand it, the Bank initially said, “Loan-to-value ratios on mortgages, and loan-to-income ratios, are an awfully big decision. There is a lot of politics in that. We are not that keen. Push that back to the Treasury.” I think the Treasury has been saying, “No, Bank of England, this is a decision for you to take.” These are inherently political issues and our constituents would rightly ask whom to hold to account for such big decisions that affect their daily lives: whether or not someone can get a mortgage, what is happening in the housing market, and so on. That is why we still have some reservations about the governance structures and the lack of accountability on policy making. That is why we are asking for an assessment of the impact on economic growth whenever these levers are pulled and whenever these decisions are taken. I accept that there are careful balances to be struck. The FPC of course has to have an eye to stability, but it also needs to recognise, as the Chancellor has said, that we do not want the risk-aversion of the graveyard so that there is no economic activity. That is why we have suggested this particular change.
	I am conscious of the time and I know that a number of hon. Members want to speak. Those are the main points that I have to make about our particular arrangements and it would useful if we could hear the views of others.

Andrew Tyrie: The Bill came out of the other place only last Wednesday night and it was heavily amended there. It is the most complicated, and one of the most important, pieces of financial legislation for decades.
	Much of what we are considering today amends provisions in the Bill, which themselves amend the Financial Services and Markets Act 2000 and the Bank of England Act. The Bill is incomprehensible without constant referral to FSMA. I would go further and say that it is incomprehensible in parts even after considerable referral to FSMA. We now have a piece of legislation that passeth all man’s understanding, like God’s will. FSMA itself was arguably the most complex piece of legislation ever passed by Parliament. I was on the Bill Committee and it was certainly pretty testing.
	We are now legislating in a huge rush to get this on the statute book by the end of the year in order to meet an entirely arbitrary deadline. The deadline has been rendered all the more absurd by the fact that we will be back here next year anyway amending it as part of the banking Bill, which is required to give effect to the Vickers commission’s recommendations, parts of which have to be done by amending FSMA and cannot be done in any other way. I am not making some recondite point about parliamentary procedure; I am making a point about how to make the Bill effective. It is a point that is being made to me right now by senior regulators, who would very much prefer that we just take a little bit more time to get the legislation right.
	This group of amendments deals largely with Bank of England governance. Everyone is agreed that Bank of England governance is in a huge mess. That is why last April the Treasury Committee took the highly unusual step of tabling a new clause in an effort to try to sort it out. I am particularly grateful to colleagues from four parties on the Committee who all co-operated to
	enable that amendment to go down with unanimous support. I am also particularly grateful to my deputy Chairman, who is sitting on the Opposition Benches, who assisted with the tabling of that clause. It was needed because the Bank has ramshackle governance arrangements that reflect their 17th century origins, as the name “court” demonstrates. As has already been pointed out, better governance would improve its accountability to Parliament. But much more important in some respects, it would also improve the Bank of England’s authority to act and to speak to the rest of the country as it takes tough decisions, such as those that have just been referred to. This is a point that is not lost on very senior people in the Bank of England right now, on the Monetary Policy Committee, the Financial Policy Committee, and also a number of deputy governors.
	The Treasury Committee clause would not have solved all that, but it would have gone some way to bringing the Bank into line with good practice on corporate governance generally. It would have placed a duty on the court to conduct retrospective reviews of Bank performance and to publish the results, and it would have required the court to publish its minutes. I withdrew the amendment in the Commons only when the Government gave undertakings to make those changes in the Lords. I will come back to that.
	In May, the Treasury Committee took another highly unusual step of reporting on the Financial Services Bill, after we had looked at it in the Commons, in order to assist the other place with its examination. Most of the conclusions that we came to in that report were raised as amendments in the Lords. The Government responded to some of them and that is what we are debating now. The Government’s Lords amendment 3 sets up, as we have heard, an oversight sub-committee of the court’s non-executives. That would give the court the power to commission retrospective reviews of the Bank’s performance —that is a step forward—to be carried out either externally or internally. The Government have also inserted an amendment to require the publication of court records of its meetings. While these amendments improve the Bill, they fall well short of what we were hoping for, and what in our view is still required, for several reasons.
	First, the amendments place the power of review in the hands of a sub-committee of the court, rather than the court itself. This will further confuse the lines of accountability, not least to Parliament and to the Treasury Committee. These accountability lines are now very complex. I urge the Minister to try drawing them on the back of an envelope. I wager that he will have quite a task on his hands. Senior regulators agree that they will not do as they stand, and they have been telling us that publicly and privately. They want an improvement. They want the legitimacy for their decisions that comes with effective parliamentary scrutiny. Senior people in the Bank of England have seen how the Monetary Policy Committee has been strengthened and bolstered as a result of effective scrutiny by the Treasury Committee.
	Secondly, the amendments fall short of what is needed because they require publication not of the minutes of court meetings, but merely of a record of such meetings, which I do not think would necessarily amount to much. A moment’s thought can tell us how unrevealing a mere record might be.
	Thirdly, the Bill does not properly reform the court. It does not bring governance of the Bank into line with what most of us would consider to be the norms of corporate practice, whether public or private, right across the country.
	Fourthly, no statutory obligation is placed on the court or the oversight board to respond to reasonable requests for information from the Treasury Committee. In practice, they can stonewall. I do not think that is acceptable if we are to have high-quality governance. I think that good-quality scrutiny by Parliament will be much more difficult without such an obligation being placed on the court. I worry that, at worst, the sub-committee could end up owing more to form than to substance. That is, of course, what has been wrong with the court as a whole; it has been as dignified over the years as it has been ineffective.
	Fifthly, the Governor’s central and enhanced position is unaffected and the Bank’s hierarchical nature, with him at the apex, will remain. He is a single institutional point of systemic risk in the new governance arrangements. The danger of group-think will remain. Bill Winters recently drew attention in his review to that hierarchical problem and the need to place a requirement on the Governor to consult others, particularly the deputy governor.

Alison McGovern: May I take the hon. Gentleman back to his fourth point? He mentioned the Treasury Committee’s ability to get information from the Bank. What specifically is he concerned about, and does he think that his Committee ought to be able to access data from the Bank as part of its oversight role? First, how would he improve on that point? What specifics of governance does he think we must look for? Secondly, is it a question of getting data out of the Bank so that group-think can be laid bare and investigated? Am I right to take those points from what he has said?

Andrew Tyrie: If the hon. Lady will forgive me, I will not linger on those points for too long, because the Committee has set that out in some detail in a number of reports. On her first point, in a nutshell, one need only look at the corporate governance arrangements of almost any public sector body, or indeed any public company, to see that the lines of accountability are powerfully drawn between their non-executives and the executive arm. That is almost completely lacking in the court, whose role is heavily circumscribed and, until recently, involved nothing more than oversight of the Bank’s budget. Indeed, I have been told informally that until recently an unspoken requirement of membership of the court was to have no great knowledge of financial matters, and certainly not to interfere with them. That strikes me as the negation of genuine oversight, but perhaps those who whispered such thoughts in my ear were making mischief.
	On the hon. Lady’s second point, it is of course crucial that somewhere in the accountability framework there is a group of people who are capable of asking for detailed information in order to make the scrutiny meaningful. The Treasury Committee, in our investigations into Royal Bank of Scotland, found that we needed to send specialist advisers into the FSA to obtain the necessary papers to ensure that they were taken into account in its report on RBS. I do not think that it
	would be a healthy state of affairs if the Treasury Committee ends up having to send specialist advisers into the Bank of England to perform such a role. It would be far better to have a group of non-executives in the Bank of England whose explicit task is to look for those documents and to be available to help us do the scrutiny directly. My reply to her questions touches only the surface of the more detailed reply that could be given, but it has been set out in some detail in at least two Treasury Committee reports.
	Next year we will have a new Governor. He could, of course, grasp the opportunity to improve all this, and no doubt he will form views about governance, ones that might benefit from legislative change. The Banking Commission will also make recommendations on standards, culture, competition, governance, regulation and sanctions for rule-breaking by bankers. Any or all of those might require statutory action. I would be grateful for an assurance on that from the Minister, so will he commit the Government to broadening the scope of the banking Bill to ensure that further amendments to FSMA, including in the areas I have just mentioned, can, if necessary, be made next year?

Greg Clark: I can give my hon. Friend that assurance. The Government have already said, I think in response to the question of data on lending to deprived communities, that if we do not succeed in establishing agreement with the British Bankers Association, we will use the forthcoming banking Bill to make those changes. If the distinguished members of my hon. Friend’s Commission, following their considerations, have recommendations that will require legislative changes, we will of course have vehicles available for that.

Andrew Tyrie: That reassurance is helpful. I will take it back to both the Treasury Committee and the Banking Commission.

Mark Durkan: The hon. Gentleman has referred to the new Governor. If it had been a condition of his appointment that he understood the Bill and could explain it, does the hon. Gentleman believe that he would have been appointed?

Andrew Tyrie: Well, he is a very clever man. I am confident that at the time of his appointment he would have been unable to pass the FSMA test, but I have no doubt that by the time he comes before the Treasury Committee for his pre-appointment hearing he will have mugged up fully on it all.
	I have spoken for 14 minutes already, which is four minutes longer than I make a point of ever speaking in the House these days, so I will move swiftly to one last point. The Minister, as he pointed out, started looking at the Bill three quarters of the way through the process of putting in place a new system of financial regulation. I will wager a pound to a penny that he has found the tangled web of legislation that we have just been discussing extremely confusing. In fact, I wager that he has found it, in places, to be a nightmare and impossible to understand. I wager the same amount that the officials advising him do not always understand it either, and that is no reflection on the high-quality advice he is no doubt getting. Will he be prepared at least to consider rewriting FSMA afresh when he comes to adapt it to take account
	of the banking Bill, because that is what regulators have told us they would prefer, what the Governor of the Bank of England said he would prefer and what would enable the industry, the public and Parliament to have a much more intelligible piece of legislation?
	It is a great shame that that approach, which was vigorously put forward at the time, was rejected when the Government first announced that they would proceed with amendments to FSMA. The Governor was pressing for it very strongly, and he had allies in Parliament. We now have a second chance, and I very much hope that the Minister will consider taking it. He will need to bear in mind that there will be 100—perhaps 1,000—official voices telling him not to do that, but just occasionally there are moments when a Minister can greatly improve the quality of the statute book. Would he be prepared at least to consider rewriting the Bill so that we have one fresh piece of legislation that everyone can understand?

Greg Clark: This has been a short but interesting debate, and I am grateful to the hon. Member for Nottingham East (Chris Leslie) and to my hon. Friend the Member for Chichester (Mr Tyrie) for contributing to it. I think that my hon. Friend does himself a disservice. If anyone can follow, and indeed have imprinted in his mind, every clause of FSMA, and be able to relate it to any future amendment, I know that he is capable of it. Let me first respond to some of the points made in the debate, including his.
	The Bank of England is obviously at the heart of the financial system, and the changes are among the important reforms of its powers in history, alongside nationalisation in 1946 and independence in matters of monetary policy in 1998. Notwithstanding the few remaining issues of debate, I think that the whole House would agree that the changes made in the Lords represent a significant improvement in this part of the Bill. The amendments will strengthen the governance and accountability of the Bank. They will give the Financial Policy Committee a more positive and proactive mandate around economic growth and shift its membership to reduce the influence of the Bank’s executives. In addition, there are clarifications to simplify the drafting and terminology, if perhaps not going as far as my hon. Friend would wish to go. The name “court” is retained, despite his preferences.
	On the Opposition amendments, I do not think that there is, in practice, a huge degree of difference between us. As the hon. Member for Nottingham East said, amendment (a) to Lords amendment 1 would add the word “overseeing” to subsection (2) of new section 3A of the Bank of England Act 1998. That was well debated in the House of Lords, as he will know. Some clarity was achieved there, in that the kind of oversight in which the oversight committee is expected to engage is common to non-executive directors elsewhere. Baroness Noakes made particular reference to that. The opportunity to review decisions and to consider how they are made is well understood in the context of the term “oversight”. The hon. Gentleman is proposing something that goes beyond that: that oversight should contain a more real-time role as well as a backwards-looking role. That could involve second-guessing the Bank’s policy decisions while they are being taken, which would not be appropriate. Indeed, it would go against the recommendations of the
	Treasury Committee, which said in its report that it agreed with the Governor that the Bank’s governing body should place more emphasis on oversight and ex-post scrutiny that would not authorise it to become involved in second-guessing immediate policy decisions. That is the advice that we have taken.

George Mudie: That should be qualified by the fact that the current Governor of the Bank of England does not want to be second-guessed by anyone. In fact, he would suggest that the best decision-making process is himself sitting in a room taking the decisions, questioned by no one.

Greg Clark: The hon. Gentleman has more experience of questioning the Governor than I have. The Joint Committee on the draft Financial Services Bill, of which he was a member, volunteered to agree with the Governor on that assessment, at least. We followed the Committee’s advice on that, as was recognised in the other place.

Christopher Leslie: I understand the Minister’s argument. However, we are talking about a lot of power in the hands of a single individual—the single point of potential institutional disruption, as the Chairman of the Treasury Committee called it. Surely the sun king is capable of responding to some internal questioning, scrutiny and challenge, and that would be a healthy thing to have. Some kind of more proactive oversight might therefore not be such a bad idea after all.

Greg Clark: All those things are provided for in the Bill; the question is whether the word that the hon. Gentleman seeks to introduce is a matter of semantics or would bring in scrutiny of current decisions. That is a point of difference between us. In the House of Lords there are many people with experience of being very effective non-executive directors, as I know from my distinguished constituent, Baroness Noakes. Most people would recognise that she is meticulous and robustly independent in the scrutiny that she brings to matters, and she regarded the wording of the Bill as entirely compatible with that. It is not right to go against what the Treasury Committee recommended and to have the second-guessing of immediate decisions.
	Let me say something about the existing powers. The report by the Treasury Committee recommended that ex-post reviews of the Bank’s performance should be carried out, and those are provided for. In fact, the current wording of subsection (2) of new section 3A of the 1998 Act requires the oversight committee to
	“keep under review the Bank's performance”,
	and that is consistent with the Committee’s recommendations. We think that this wording strikes the right balance between ensuring effective retrospective scrutiny of the Bank’s policy performance and avoiding a situation whereby the non-executive members of the court would be constantly second-guessing the decisions taken by the Bank’s expert policy committees and executives.
	Amendment (b), tabled by the hon. Member for Nottingham East, would give the oversight committee an additional function to keep under review the adequacy and effectiveness of the Bank’s arrangements with the Treasury for crisis management. It is very important
	that that should be under review, for all the reasons he said. Subsection (2) of new section 3A gives the oversight committee a broad remit to keep under review the Bank’s performance in relation to all its objectives and strategy. It is absolutely clear—I would like to confirm this from the Dispatch Box—that the effectiveness of the Bank’s relationship and co-ordination with the Treasury in crisis management is fundamental to the Bank’s achievement of its objective to protect and enhance stability. As such, the oversight committee can already undertake or commission a review into the effectiveness of these arrangements if necessary. In fact, in January this year the Bank said in its response to the Treasury Committee that the oversight committee should, among other things, assess whether the Bank is fulfilling effectively its duty to notify the Treasury of risks to public funds at the appropriate time. There is no substantial difference between us that the amendment is seeking to expose.

Christopher Leslie: The problem is the threadbare nature of the memorandum of understanding, particularly the infamous paragraph 20, which says:
	“However, the Chancellor and the Governor may agree to establish ad hoc or standing committees.”
	That is so thin that it is important for the oversight committee to make it a top priority to ensure that there is preparedness and that it is thinking through the circumstances in which a crisis may occur, and that needs to be placed explicitly in the Bill.

Greg Clark: I am grateful for the hon. Gentleman’s clarification. We should bear it in mind that the Bill requires the Treasury to lay the MOU before Parliament and to publish it. It will be subject to full transparency. For example, I would be very surprised if my hon. Friend the Member for Chichester did not call the Chancellor or the Governor to explain it. The oversight committee will be responsible for overseeing the Bank’s performance and, clearly, the MOU is a key part of its work in bringing to bear the Bank’s financial stability work. The committee will, therefore, consider from time to time whether it is working well and Parliament will itself have every opportunity to address the issue.
	Amendment (a) to Lords amendment 16 would require the Financial Policy Committee to produce explanations of its decisions to exercise its recommendation and direction powers. Proposed new section 9QA(1) of the Bank of England Act makes it clear that the FPC’s explanations must set out how its decisions are compatible with its objectives, including the new objective to support the Government’s objectives for growth. It is clear that it has an explicit responsibility to do that. The FPC’s explanations will have to set out publicly how it has considered the impact on economic growth when deciding to take action and its reasons for believing that the action is compatible with its obligations in relation to economic growth.
	Lords amendment 16—specifically subsection (3) of proposed new section 9QA of the 1998 Act—already requires the FPC to produce estimates of the costs and benefits of the decisions, including those areas to which the hon. Member for Leeds East (Mr Mudie) has referred. This will cover the impact on financial stability, both directly and indirectly, and the impact, both positive and negative, on economic growth.
	I reassure the House that the FPC is giving considerable care and thought to the impact of these tools. The Bill requires the committee to produce and maintain policy statements for its direction tools. The statements will discuss the likely impact on both financial stability and economic growth. The Bank is preparing a draft of the statements, to be published early next year, so that they can be considered alongside the secondary legislation that will set out the FPC’s direction powers. We do not, therefore, think that amendment (a) to Lords amendment 16 is necessary.

George Mudie: Both the Treasury Committee and the Joint Committee on the draft Financial Services Bill were concerned about the important parts of the Bill that will be delivered through statutory instruments. That means a discussion in Committee for an hour and a half, with no provision for amendment. We would either have to accept the whole instrument or vote against it, and we would not have a majority on such a Committee. We pressed the Chancellor for a different, more flexible structure of decision making on secondary legislation so that the House or the Treasury Committee could debate it with the prospect of convincing the Chancellor, at some stage, to amend his direction of travel.

Greg Clark: I am grateful for the hon. Gentleman’s point. I am not able to produce a novel parliamentary procedure, but I can certainly tell him and the Chairman of the Treasury Committee that when the time comes to publish the statutory instruments, if they or their Committee would like to consider and advise on the discharge of the commitments, I would be happy to engage with them in good faith and take on board any suggestions.

Christopher Leslie: I am delighted to hear that concession from the Minister. We have suggested a super-affirmative procedure for some of the regulations. That would give the Treasury Committee and others more time to look at the issues and ask the other Select Committees about the effect on, for example, housing and communities and local government. If the Minister is willing to open that door, we would support him.

Greg Clark: I give the hon. Gentleman an inch and he takes a mile. I will not commit to a different procedure but, as I have said, I will certainly commit, in good faith, to considering personally any points that are made. [ Interruption . ]

George Mudie: Has the Minister just been handed fresh instructions?

Greg Clark: They may be fresh instructions, but I have decided not to read them. I may be countermanded, but I will not retract my statement.
	I will conclude by addressing what the Chairman of the Treasury Committee has said. I am reliably informed by my predecessors that this Bill, though complex and voluminous, has been well considered in numerous Committee sittings in this House, and I think that most people will conclude that their lordships have done a good job in their scrutiny. The Bill is important and it is right that it has been scrutinised to the extent that
	I think it now commands the broad support of the House, as evidenced by the relatively few amendments that have been tabled to their lordships’ amendments.
	As I said in response to an earlier intervention, opportunities will be presented to the House in the years ahead—new Bills are already gathering speed on the runway—to accommodate further changes, should they be necessary. If so, I am sure we will have further conversations about them.
	My hon. Friend the Member for Chichester issued me a challenge to rewrite the Financial Services and Markets Act 2000 and anticipated that I would be besieged by objections from officials and others.

Andrew Tyrie: Turn around.

Greg Clark: I will not turn around and look at my officials in the Box, because I am sure I would get some black looks. My hon. Friend would not expect me to make a commitment, but I know—this is the case with everything he says—that he speaks from experience and that he examines the issues meticulously. I will look at what he has said, but I ought not, at this late stage, to raise his hopes too high.
	Lords amendment 1 agreed  to .
	Lords amendment 2 agreed  to .
	After Clause 2

Oversight Committee

Amendment  (b) proposed to Lords amendment 3 .—(Chris Leslie.)
	Question put, That the amendment be made.
	The House divided:
	Ayes 224, Noes 293.

Question accordingly negatived.
	Proceedings interrupted (Programme Order, this  day ).
	The Deputy Speaker put forthwith the Question s  necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).
	Lords amendment 3 agreed to.
	Lords amendments 4 to 23 agreed  to .

Andy Slaughter: On a point of order, Madam Deputy Speaker. On 29 February this year, I asked the Secretary of State for Justice whether he would name the 25 highest-paid lawyers and the amounts they received. I was told the information would be available in due course. I asked again on 19 April, and was told the information would be available later this summer—[ Interruption. ]

Dawn Primarolo: Order. Will hon. Members who are leaving the Chamber please so do quietly? Those remaining in the Chamber should listen to the point of order and if they wish to have private conversations, they should leave the Chamber. I cannot hear what the hon. Gentleman is saying. I got as far as 29 February so perhaps he will pick up his point from there.

Andy Slaughter: My initial question on 29 February asked for the names of the 25 highest-paid lawyers and I was told the information would be available in due course. I asked again on 19 April and was told the information would be available later in the summer. Yesterday, the answer to my question was spread over the pages of The Sun and The Sunday Telegraph with the Justice Secretary’s inimitable spin put on it. This afternoon, I received a reply to my question from Lord McNally. Is it appropriate to wait nine months for a question to be answered, and for it to be leaked all over the Sunday press the day before that answer is received? Even by the standards of this Government that is poor. Will you give me some advice, Madam Deputy Speaker, on how I can avoid a repetition of that?

Dawn Primarolo: Clearly the Government thought long and hard about how to answer the question—a little too long, in fact—and information was released to the press before the hon. Gentleman received it in writing, although he has it now. There is not a great deal that I can do from the Chair, but I recommend that the hon. Gentleman takes the matter up with the Procedure Committee. Nine months is a little long, as I am sure most Members of the House would agree.
	Let us move on to the next group of amendments.

Greg Clark: I beg to move, That this House agrees with Lords amendment 24.

Dawn Primarolo: With this we may take Lords amendments 25, 41, 63, 78, 86, 128 to 138, 147, 231 to 233 and 236.

Greg Clark: The amendments in this group relate to key considerations that have underpinned the design of the new conduct regulator. The Government have been clear that regulation should focus on making financial markets work well, and on securing better outcomes for consumers.
	Access is critical. Without access to a bank account, for example, it is difficult for individuals to participate fully in the economy and even in society. To support access, Lords amendment 25 adds a new “have regard” to the Financial Conduct Authority’s competition objective. Therefore, when considering whether effective competition is in the interests of consumers, the FCA must have regard to
	“the ease with which consumers…including consumers in areas affected by social or economic deprivation, can access”
	the services they may wish to use.
	That reflects discussions in the other place, and it is right to make it clear that the regulator’s duties embrace those affected by deprivation.

Gareth Thomas: The Minister gave the example of access to a bank account, but may I draw his attention to the issue of access to a bank branch in order to access one’s bank account? Already, a series of communities no longer have bank branches. Will he say how the FCA will use this new power to consider communities that lack not access to a bank account but access to a bank branch in the first place?

Greg Clark: The hon. Gentleman makes a reasonable point. However, having set up the FCA to put supervision into practice and added this concern to its objectives, it would be unreasonable for me to tell it how to exercise its powers before it has even come formally into existence. It will consider the issue of access and come to a view. That will be open to scrutiny by the Treasury Committee and, I dare say, other Committees of the House.
	Where the FCA has identified a problem with access, the regulator will consider whether it could take action to close gaps in provision by promoting competition in the interests of consumers. It may also consider whether its own rules and requirements are imposing a burden on competition and restricting access.

Nicholas Soames: Does my right hon. Friend agree that it matters that it is not too difficult to open an account in the first place? Every
	bank treats anyone who wants to open an account as a first-class money launderer, but it is essential that opening an account is not too complicated.

Greg Clark: My right hon. Friend is absolutely right. That is the import of the amendment I mentioned—we have stressed its importance. The Bill has substantially improved regard for competition, including by addressing the possibility that regulators, whether inadvertently or by neglect, might impede it. An explicit requirement to have regard to competition will help in that matter.
	Consumer credit is a topic of great interest. A number of provisions in the Bill enable the transfer of the regulation of consumer credit from the Office of Fair Trading to the FCA. That will take place by April 2014 and constitutes a major transformation in the regulation of consumer credit. As all hon. Members know, there was strong cross-party consensus in the House of Lords on the need for strong regulation of the payday loans market. Members on both sides of this House feel just as strongly.

Tracey Crouch: There has been a proliferation of payday loans companies setting up in Chatham high street. Hon. Members have raised the issue for some time, so I welcome the Government’s decision. When will the university of Bristol research into a cap be published? Will it be published before Christmas?

Greg Clark: My hon. Friend is a real campaigner—anyone who suffers poor treatment in Chatham can count on her vigorous support in defending themselves against people who have more power. My understanding is that the research being conducted by the university of Bristol is pretty close to completion. I am not certain whether it will be published just before or just after Christmas, but I will ensure that my hon. Friend is alerted as soon as it is laid before the House.
	Lords amendment 78 clarifies that the FCA will have the power to impose restrictions on the cost and duration of a regulated credit agreement. It ensures that potential loopholes that could be exploited by unscrupulous firms are addressed, for example by ensuring that the FCA’s rules under the power cover linked charges and connected agreements. The amendment provides for the agreement to be unenforceable by the lender, for any money or property secured against the loan to be returned to the borrower, and for compensation arrangements to be put in place.

Helen Goodman: Will the Minister clarify for the House whether the rules apply to organisations such as BrightHouse, which sells furniture and white goods at very high interest rates as well as via straightforward money transactions?

Greg Clark: The hon. Lady would not expect me to comment on a particular firm when I do not know the details, but she makes a perfectly reasonable general point. If a firm is a regulated provider of credit, the provisions apply to it in the same way.

Helen Goodman: But it sounds as if people selling goods at exceptionally high interest rates on hire purchase agreements are not regulated credit providers. Therefore, is there not a bit of a loophole in what the Minister offers?

Greg Clark: I do not believe there is a loophole. Firms are required to be regulated for those aspects of their business that provide credit to consumers. They therefore fall squarely under the FCA’s powers.
	The Government tabled a number of amendments in the Lords to ensure a smooth transfer of consumer credit regulation from the OFT to the FCA, and to ensure that the FCA regime is proportionate and gives the right protection to consumers. We also introduced amendments in response to concerns raised by the House of Lords Select Committee on Delegated Powers and Regulatory Reform. For example, Lords amendment 136 requires the Treasury to have regard to the importance of securing an appropriate degree of protection for consumers and for the principle of proportionality.
	Lords amendment 130 responds to the Committee’s concern about double jeopardy. It provides that when criminal sanctions under the Consumer Credit Act 1974 and regulatory sanctions under the Financial Services and Markets Act 2000 are available to the FCA in relation to the same act or omission, a person may not be convicted if he has already been subject to sanctions under FSMA.
	Lords amendment 233 and associated technical amendments address a possible loophole that might otherwise emerge as a result of moving from a CCA-based regime to a FSMA-based regime. Under FSMA, it is an offence to carry on a regulated activity without authorisation, whereas under the CCA, it is an offence to lend money or collect debts without the right category of licence. The Government tabled amendments in the Lords to make it a criminal offence to lend or collect money without the correct permission. That addresses the risk of sophisticated illegal money lenders seeking authorisation for a lower-risk activity, only to use that as cover to engage in lending or debt collection, to the potential detriment of consumers. Lords amendment 233 also ensures that any agreements entered into or being enforced by a person without the necessary permission become unenforceable, meaning that important protections in the CCA for victims of illegal money lenders or debt collectors are replicated in the new regime.
	Lords amendments 63 and 232 make changes to how the appointed representatives regime under FSMA will operate when firms carry out a credit-related activity—for example, by acting as ancillary credit brokers. The amendments create a limited carve-out from the provision in FSMA that firms cannot be both an appointed representative and authorised at the same time. They provide that if a firm is authorised for a particular category of consumer credit activity, it would also be able to become an appointed representative.
	Consistent with CCA provisions, the Bill allows the Treasury to enable trading standards to prosecute offences under FSMA. Government amendments enable the Treasury to confer similar powers on the Department of Enterprise, Trade and Investment in Northern Ireland. They enable the Treasury to confer powers on trading standards and DETI to investigate offences under FSMA.
	The amendments to which I have spoken so far have been concerned with the new regime, but the transfer to the FCA will not take place until April 2014, and it is clear that there are problems in the sector that the OFT needs to address in the meantime. The findings of the recent OFT report into compliance standards in the payday lending market show that compliance levels are
	low and that a number of practices that clearly cause consumer detriment are rife in the sector. To empower the OFT to operate as effectively as possible in the interim period, Lords amendments 138 and 147 give the OFT a new power to suspend consumer credit licences with immediate effect if it considers that necessary urgently to protect consumers.
	Finally, on social investment, the Government tabled Lords amendments 24 and 41 to ensure that the particular needs of different sectors and the consumers that use them are taken into account—they are not specific to social investment but apply to alternative and innovative business models more generally. Lords amendment 24 requires that, when the FCA is considering its consumer protection objective in future, it will be required to have regard to the different expectations of consumers in relation to different types of financial service. In other words, if people with their eyes open go into a social investment model, it will be entirely appropriate for advisers to advise on such products.
	Lords amendment 41 adds a new regulatory principle to clause 3B—the principle applies to both the Prudential Regulation Authority and the FCA. The measure requires them to have regard to the different nature and objectives of different financial services businesses. It is intended to make clear that there should not be a one-size-fits-all approach to regulation, because sectors such as social investment have an important part to play.

Gareth Thomas: I apologise for interrupting the Minister’s strand of thinking on the social investment measures, but may I take him back to payday lenders? The noble Lord in the other place introduced a series of Government amendments designed to deal with the problem. Will the Minister offer the House a definition of payday lenders, so that we have a sense of who the Government seek to tackle with the amendments?

Greg Clark: I will not do that for much the same reasons I gave in response to the previous intervention. The Lords amendment clarifies that across all regulated lenders the FCA has broad and powerful powers, if I can put it that way, to intervene to protect consumers, including on the price or rates of interest they are charged, according to its assessment of the detriment faced by consumers. It is right to frame it in that way, and to empower the regulator to pursue sometimes even novel forms of credit that might be operating to the detriment of consumers, rather than to risk specifying in the Bill detail that might be overtaken by time or the ingenuity of people seeking to cause damage to our constituents.

Gareth Thomas: Will the Minister reflect on that answer? It would be helpful, in the context of the debate and understanding whether the amendments he supports today are effective enough to deal with the problem of payday lenders, for him to consider providing a definition of what the Government see as being the problem with payday lenders. The Opposition might have different views on what constitutes a payday lender. It would be good to hear the Minister’s views, so we might determine whether the amendments will achieve the objectives he has set out.

Greg Clark: The hon. Gentleman knows that the term, “payday lender” is relatively informal and loose. It is important for the FCA to have the powers it needs to protect consumers. Its focus should be on the consumer, rather than on a current definition of a practice pursued by a supplier. That is the way it is cast and it is the right power. From the discussions in the House of Lords last week—as he might imagine, I paid close attention to them—it was apparent that everyone who has taken a close interest in the past weeks, months and, in some cases years, was content that the powers vested in the FCA, which are clarified in the amendment, address all the concerns shared on both sides of the House.

Stella Creasy: I encourage the Minister to broaden his comments to encompass all our concerns about high-cost credit companies. Having seen the wonderful damascene conversion to the need to tackle these companies, many of us want to ensure that we do not inadvertently miss out on not just those payday or short-term lenders, but doorstep lenders, logbook loans and hire purchase agreements. High-cost credit encapsulates all those issues, and I think it would be welcome to the regulator to know that the intention of Parliament is precisely to tackle the whole industry.

Greg Clark: I am grateful to the hon. Lady for her point, which makes the point I was making to the hon. Member for Harrow West (Mr Thomas). To use the term “payday lenders” exclusively is to miss a broader range of potential practices that may cause detriment to consumers, and that is why this approach is about the powers vested in the regulator.

Yvonne Fovargue: Will the FCA be able to look at other concerns such as the misuse of continuous payment authority by both high-cost lenders and fee-charging debt management companies? The unrestrained use of continuous payment authority causes one of the biggest detriments to consumers that I have seen.

Greg Clark: The short answer to that is yes. The FCA’s powers will be broad, and defined by practice rather than activity. We have been clear that it might not be just the level of interest charged, but other practices associated with the lenders that come within the ambit of the regulator. It is clear that it will use those powers vigorously to promote the interests of all our constituents.
	I will leave my introductory remarks on that point. I am sure that Members wish to contribute and I will seek to respond to any points raised when I make my winding-up speech.

Christopher Leslie: There are a large number of amendments in this group, and they focus on consumer credit and the best interests of consumers. I want to concentrate on two in particular—Lords amendments 25 and 78.
	Lords amendment 25 was extracted from the Government and we are glad that they gave way on it. The amendment will henceforth make it clear that the new Financial Conduct Authority will have a requirement to ensure basic access to financial services particularly in deprived areas and neighbourhoods where some of our banks and financial institutions do not necessarily think that they can make millions and millions of
	pounds. That is the hope placed on the shoulders of the FCA. The key question is whether the regulator will roll up its sleeves and use the full extent of the powers that the Bill should provide. I, for one, will be seeking a very early meeting with the new chief executive of the FCA to extract commitments on how it intends to use the new powers.
	It should not have taken months of persuading and cajoling Treasury Ministers for them to accede to the changes. Perhaps it was the fresh air provided by the new broom, the Financial Secretary to the Treasury, sweeping clean with perhaps more of an open mind than his predecessor on some of these issues. If that is the case, I commend him for it. We need to begin to look at the detail, so I have a series of questions for him, starting with Lords amendment 25.
	There are already what some people call lending deserts. In some communities, bank branches are not as readily available as they are in other, more affluent areas. In some deprived areas of the country, it is hard for consumers to access affordable credit. The key word—affordability—is of course now well known. If people want to be completely ripped off, they can pay for high-cost credit, often on a very short-term basis, with immense interest rate charges that can accumulate and get them into severe jeopardy. That will lead to further financial exclusion if they cannot keep up with the repayments, and to them being trapped in a spiral of poverty.
	It is important to hold the big five banks to account. As large institutions, they are not just private companies with no obligations beyond and above those that rest on the shoulders of any other private company. In this day and age, they are a social utility and have a duty to the community to ensure that all parts of the country have access to basic banking facilities. The work of the financial inclusion taskforce, under the previous Administration, sought to ensure that basic bank account facilities were available. With the onset of universal credit in April 2014, it will be even more important for everybody to understand and have access to those facilities. However, I am increasingly worried about the fragile deal put together under the previous Administration to support and extend those basic services. There are signs of a creeping onset of charges. As banks come out from the era where the taxpayer was essentially keeping them going, they are now starting to look to the consumer to extract more charges. I do not want a situation where banks get together and think about introducing basic charges on current accounts, especially for those who are taking care to ensure that they are in credit. There are worrying signs that that might be in the air. Even the regulators have started to say, “Well, let’s start charging a little bit for in-credit current accounts. It might be a way of ensuring we don’t have to charge such high costs for unauthorised overdrafts.”

Sheila Gilmore: My hon. Friend talks about regulating to ensure that these bank accounts remain available. Sometimes, if people find themselves being charged for an account, they simply give up, because it is too expensive, and sometimes they cannot open another account, because they have got into difficulty. That has been the experience in the past few years. I hope that the regulators will be alive to those issues.

Christopher Leslie: Indeed, that is the case. Anxiety is spreading and rumours are circulating that people with credit impairments or county court judgments against them are finding it increasingly difficult to access basic bank account services. One of the most shocking changes has been the way some of the big banks have started gradually to pull out of the LINK cash machine network. That network depends on all the banks taking part, because, if some big banks withdraw, as has happened, more of the cost of maintaining the network falls on a minority of banks, which, as a result, are more likely to walk away. I have worries, therefore, not just about the basic bank account networks, but about the LINK cash machine system, and I would be grateful if the Minister could set out to those banks in no uncertain terms that, given their social duties and responsibilities as a utility, we expect—as a de minimis requirement—that they maintain those basic, fundamental activities.

Alison McGovern: Will my hon. Friend slightly broaden his comments about the LINK system? In too many of our towns and cities, cash machines in the most deprived areas are the ones that charge. Unfortunately, the principle that those with the least pay the most is creeping back into financial services. If we do nothing else this evening, let us send the message to the financial services industry that such a principle is wholly unacceptable.

Christopher Leslie: That is true. The Opposition take the view that the financial services sector needs to move away from the old model of essentially extracting profit on the basis either of the ignorance or lack of awareness of customers—basically taking advantage of the inertia in the system—or of the fact that the consumer has no other choice. We need to support a financial services sector that genuinely adds professional value and acumen to products fairly and transparently. That is the modern sort of financial services sector that this country deserves and can have. We need to get away from that old era, in which the banking system essentially raked in multiples of small penny packets of income and profit off the backs of people who were not necessarily aware they were being charged 25p or 50p for cash withdrawals. That is the sort of bad practice we need to move away from.
	The Opposition have called for action to ensure that pockets of the country are not left isolated and on their own. In the United States, they have clear safeguards requiring banks to reinvest in communities and provide basic coverage. That counts not only for consumers, but for small businesses, which, as we know, also struggle to access affordable loans.

Gareth Thomas: My hon. Friend is making an extremely important point. He will be aware that President Obama, in backing stimulus legislation in Congress, ensured that it required banks to disclose their lending to businesses across the USA, allowing us to see the lending deserts not only for individual financial consumers, but for individual business financial consumers. Surely that is something the FCA might usefully consider requiring of our banks.

Christopher Leslie: In Labour’s view, amendment 25 ought to allow that. If we are talking about ease of access to affordable financial services, it should be a responsibility
	of the FCA to think of new ways to map what is happening across the country and to ensure that there are not these deserts or vacuums of poor availability or no availability. That is why there should be a requirement for a map to be drawn up of where and what lending is available, perhaps on a postcode-by-postcode basis. It would provide transparency and enable hon. Members to find out what is happening in their constituencies. Anecdote is not adequate; we need a more rigorous system of regulation and monitoring. That is how it is often done in other developed countries, such as the US, as my hon. Friend said.
	In the past, Ministers have said that they are opposed to that level of transparency. I am not sure about this Minister—I know he will want to take a fresh perspective—but previous Ministers said: “It’s too burdensome to require transparency in respect of lending patterns, and there might be anti-competitive issues as well.” It would be entirely feasible to collect anonymised data in the way suggested, however, and I hope that Lords amendment 25 could be so interpreted.

Mark Durkan: Like my hon. Friend, I welcome amendment 25, which, I note, was something he laboured on valiantly when we spent our Lent in Committee. Does he recognise, however, that in one part of the UK —Northern Ireland—the five high street banks he referred to are not part of the banking profile? In Northern Ireland, we are facing a twilight zone of banking, with changes happening almost by default squared—as a result of changes here and in Dublin—and that will change further in the context of banking union. That is why we need to question how the FCA would use the powers being given to it under amendment 25.

Christopher Leslie: Exactly. I imagine that what my hon. Friend describes is absolutely correct. Incidentally, I pay tribute to him for his endeavours in trying to improve the legislation, month after month after month, as we proceeded through Committee and on Report. The situation in Northern Ireland will be compounded by different factors, so how much more useful would it be if he and his neighbouring parliamentary colleagues had access to data about lending availability in a more rigorous form? That is how we want to interpret amendment 25 and how we will press the FCA to interpret it.

Gareth Thomas: Is there not a danger that the Minister might see amendments 25 and 78 as a “Get out of Jail” card when it comes to taking real action to tackle the problem of payday lenders and the lack of access to financial services in many of our most deprived communities? Might he not say, “Well, 2014, when the FCA comes in, will be the time to act”? Does he not need to adopt the same initiative as my hon. Friend mentions by having a meeting with the chief executive of the FCA and saying, “We want action on these issues. We want you to set out clearly before you take office what you’re going to do about the problem of payday lenders and what steps you’re going to take to require better access to financial services in the most deprived communities”?

Christopher Leslie: That is correct. The Minister ought to be meeting the FCA regularly, and clearly those are the questions the House expects Treasury Ministers to put to the new regulators.
	Lords amendment 78 was another concession that had to be dragged from the Government at great effort. I do not expect too much sympathy from you, Madam Deputy Speaker, but it is quite difficult for the Opposition to win votes in this House. Occasionally we have the odd success, such as on the EU budget—I do not want to talk about these things too much, as I know the Minister is a bit raw on that point—but by and large we try our best, we make our suggestions and we do not get very far. However, on this issue the Government were faced not just with the weight of argument by many hon. Members—including, of course, my hon. Friend the Member for Walthamstow (Stella Creasy)—but with the spiritual hand of assistance from the new Archbishop of Canterbury-designate in the other place, the Cross-Bench Bishop of Durham, as is. The Government had no choice but to make that historic concession when faced with the overwhelming moral and political case and the breadth of cross-party agreement.
	The Commercial Secretary to the Treasury admitted that amendment 78 would not be a silver bullet for the problem of high-cost credit—payday lending or however we characterise these things. Although we are slightly disappointed that the new expanded Lords amendment 78 does not refer to “consumer detriment”, we hope that some of the provisions will open the door to enabling the Financial Conduct Authority to take urgent action to clamp down on some of the high costs involved, as well as the duration and rolling over of some payday loans or high-cost credit arrangements again and again, getting people into a spiral of dependency with massive credit costs, which are severely damaging to very many people.
	My questions for the Minister are these. If the legislation no longer contains the “consumer detriment” litmus test, what will trigger intervention by the regulator? What will be the test? We are keen on many of the ideas in the amendment. The power to recover funds for consumers, the power to strike down enforcement action by an unreasonable lender and the power to insist on compensation for customers are all good, but we need the Minister to explain in slightly more detail how the Financial Conduct Authority will trigger those powers. Will individual complainants ring up the FCA hotline? Will litigation or a set of class-action cases be needed to get the FCA to take note, or might it send mystery shoppers around the country to undertake proactive investigations and say, “This is not good enough; we will see action”?
	We are glad that Lords amendment 78 also makes changes on unlawful communications. That is welcome. Hon. Members will be looking at the clock and thinking, “Well, usually about now”—some time between 7.30 pm and 8 o’clock—“we get text messages from companies trying to convince us that all our debts can be written off in a voluntary arrangement under new Government legislation.” We might get spam or a cold caller saying, “Did you realise you’ve got £2,500 overdue, if only you put in your PPI claim before Christmas?” It is around this time in the evening that people will be getting these sorts of automated calls. There are all sorts of advertising, text and cold-call arrangements proliferating across the country.
	Many of our constituents are totally baffled about what is being done and what can be done by the relevant authorities to stop such exploitative behaviour. Apparently, some of the companies trying to exploit vulnerable individuals use mechanised arrangement to poll thousands and thousands of people, and even if only 1% pick up the phone and say, “Oh well, I’d like more information,” the volume of calls means that they can make significant profits. A lot of these automated telephone arrangements are routed through foreign jurisdictions—often not even in the European Union—as a way of skating around advertising regulations.
	We want amendment 78 to get a grip on some of those questions. I know that financial services companies are not always the ones directly involved—it could be what are known as claims managements companies. There are also organisations peddling debt management plans that have high fees associated with them. People are sold a product by a company that says, “Let’s consolidate all your expensive loans and we’ll take a single payment instead.” People think, “That sounds rather good,” and they start making payments. Perhaps months go by, during which they pay, thinking that they are defraying their debts, but when the company goes bust, they find that they have paid down absolutely none of their debts. All they have been doing is paying for the profits taken by a fee-charging DMP provider. Those are the sorts of services we want the Financial Conduct Authority to tackle.
	We have had a lot of shilly-shallying on these issues. Quite frankly, it should not have taken nine months of hard effort to extract this concession from the Government since we first tabled an equivalent amendment in Committee back in March. We are glad for small mercies—this is a step in the right direction—but it is now for the Minister to explain how Lords amendments 25 and 78 will bite and how they will help people in their daily lives. I look forward to hearing his response.

Helen Goodman: I want to speak to Lords amendment 25. The Minister was not terribly clear in his opening remarks about whether it concerned consumers as individuals or whether it would be interpreted more widely, to address the branch networks that the main clearing banks operate. When he winds up, I urge him to say something about the significance of having a nationwide branch network to ensure that all communities can be financially included.
	This issue came to my attention in July, when I received a letter from HSBC, which wanted to close its branch in Shildon in my constituency. Shildon is a town of slightly more than 10,000 people, many of whom have been banking with HSBC for a long time. Many local businesses—600 of them—bank at the Shildon branch. It is much cheaper for everybody to have a local branch than to get on the bus, go down to Bishop Auckland, put money into the bank or take it out, and then come back again. The round trip on the bus costs £4. It is absolutely ridiculous that people should face such barriers. We mounted a great campaign and a huge petition, but of course HSBC has paid no attention whatever to the needs of the people of Shildon. I happened to come across a man at the Labour party conference who revelled in the title of “Director for wealth management”, and who was apparently the person responsible for the branch network. It is true that there
	is not a lot of wealth to manage in Shildon; none the less, people in Shildon need a proper banking service, just like those in other parts of the country.
	As well as thinking about that need, we need to think about the impact on the rest of us. Let us suppose that somebody who lives in a perfectly well-banked part of Durham wishes to make payments in Shildon, belong to an organisation there or make transactions with people there. It is far easier and better for everybody if they know that there is a proper national network of bank branches. I urge the Minister to comment on the branch network in his closing speech.
	I remind the Minister that over the last four years taxpayers have given the major banks a considerable amount of support through subsidies and guarantees, yet although they are too big to fail, they are not too big to fail their customers, which is exactly what they are doing. HSBC claims in its slogan to be “the world’s local bank”, but it is not very local in my constituency.
	We were fortunate to have the divine intervention of the Bishop of Durham, who seems to have succeeded in reaching parts of the Government that we were unable to reach, but I want the Minister to understand that if we are to build a successful economy in the north of England, we need to support small businesses and the communities that are currently being marginalised. If we do not do that, and if we simply concentrate on investing in high-tech, high-success areas, we will end up with pockets of success in a sea of deprivation. That is not the kind of country that we want to live in.
	We want to see one-nation banking that will provide an opportunity for everybody to avail themselves of banking services. In a modern economy, people simply cannot function without a proper bank account. Without one, they cannot have a job, get a good deal from the utility companies or receive money from other people. A bank account is now an essential part of modern life, and I hope that the Minister will take this matter to heart, talk to the FCA about it and say more to us about it this evening.

Gareth Thomas: I am grateful for this opportunity to take part in the debate tonight. I echo some of the concerns that have been expressed by my hon. Friends the Members for Bishop Auckland (Helen Goodman) and for Nottingham East (Chris Leslie). I hope that the Minister will see his response to the debate as an opportunity to convince the House that Lords amendments 25 and 78 are not part of an attempt to put off action on payday lenders or on lending deserts.
	I want to offer the House the example of the community of Thamesmead and Abbey Wood. It is a community of about 55,000 people in south-east London. The houses there were built in the 1960s in response to what was then seen as London’s housing crisis. There is no bank branch in the whole of that community. Not one of the big five banks has a branch there. The nearest branch is 30 to 45 minutes away by public transport. This is not for want of trying by a whole series of people to convince the big five banks to establish themselves in the area. An excellent organisation, the Thamesmead Trust, has tried to persuade the banks to set up there. The former Member of Parliament for Erith and Thamesmead, John Austin, has also tried many times,
	and the present Member, my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce), has made a number of efforts as well, but there is still no bank in the area.
	The community of Thamesmead and Abbey Wood is clearly not the only area without a bank, as my hon. Friend the Member for Bishop Auckland illustrated, but I worry that many of the lending deserts in this country are not yet out of the closet, if I can use that term. We do not have the necessary information to chronicle by postcode the lending that is taking place to businesses and to individual consumers. As my hon. Friend the Member for Nottingham East said, many of the banks in question are established in the United States, where they have to provide those data. As I said in an earlier intervention, President Obama supported calls for business lending to be publicised, on a postcode basis, so that people could see where lending was taking place and where it was not. That provision has now been written into American law.
	We have called not only for the publication of lending data by postcode but for an obligation to be placed on banks to lend into every community. If they are not prepared to do that themselves, there should be an expectation that they will do so through community development finance institutions, through charity banks or through credit unions, but the obligation should be on the banks to demonstrate that they were providing lending into communities through those alternative sources if they were not prepared to do so directly themselves.

Helen Goodman: My hon. Friend reminds me that I asked HSBC, when it was closing its branch in my constituency, if it would instead put £10,000 into the local credit union. I received a letter from the bank today saying that it would not.

Gareth Thomas: My hon. Friend gives a good example of the lack of joined-up thinking in our financial services markets. It would be good to see the big beasts of the financial services jungle supporting the newer players that want to address the problem of lending deserts.
	Numerous websites offer comparisons between banking products, but the Centre for Responsible Credit has highlighted how, in practice, the banks release very little information about their lending at community level, either for businesses or for personal customers. Data on lending to and deposits from small businesses and third sector organisations, by postcode or at neighbourhood level, are not routinely available in the UK, even though much of that information is held by the banks and could be released.
	The last time I spoke to representatives of the British Bankers Association, they told me that they were looking at this issue. It would be good to hear what the Financial Secretary thinks about it. My hon. Friend the Member for Nottingham East clearly thinks that the Minister will be a new broom sweeping through the fusty ways of the Treasury, and I hope that he will use his considerable influence to maintain the pressure on the British Bankers Association to step up the release of those data. I also hope that he will use his meetings with the chief executive and board members of the Financial Conduct Authority
	to require them to initiate similar pressure, in private before the FCA is properly established, and in public thereafter.

Susan Elan Jones: My hon. Friend has been talking about bank deserts. Would he also accept that there is also a problem when small branches in rural communities close? We accept that some of those communities are very small, but there is a sense that once a bank has deserted a community, almost nothing can be done to support the businesses there. That is also something that we need to look at.

Gareth Thomas: My hon. Friend makes a very good point. The situation is particularly stark in rural communities, but it is increasingly stark in many urban areas. North Harrow, in my constituency, no longer has a bank, and businesses in that area are extremely disappointed by the lack of easy access to banking services and the inability to have a proper discussion with a local bank manager about their finance needs.
	I hesitate to suggest that the Minister might enjoy and benefit from a foreign trip, but should he find time in his diary, he might like to go to Washington and spend a little time with the National Community Reinvestment Coalition. He would find a considerable amount of expertise there on the disclosure of lending data by banks to businesses and individual consumers. He might like to bring back to the House, and to his conversations with those in the financial services industry, the benefits of the US legislation, the most recent update of which has happened since 2010.
	Let me return briefly to the definition of payday lenders. If I may say so, I thought the Minister quite skilfully used an intervention made by my hon. Friend the Member for Walthamstow (Stella Creasy) to avoid defining payday lenders. I gently encourage the Minister to look again, not necessarily in the context of this debate, but separately, at how payday lenders should be defined. Even with the power proposed by the Lords, the question of definition is still ducked. If there is to be the interest rate cap for which so many Members, led by my hon. Friend the Member for Walthamstow, have campaigned, we must have clearer definitions of which financial services businesses are included within the term “payday lenders” or the high-cost credit definition that was just mentioned, so that proper action can be taken.
	I fear that many of the payday lenders who have looked at the amendment that the new archbishop has helped to force over the line, perhaps, in the House of Lords will recognise that there is no definition as yet, and so will not feel sufficiently worried to change their practices.

Tracey Crouch: I had not intended to speak in this debate, but I rise briefly to talk about Lords amendment 78. I want to speak partly so that I can place on the record my recognition of the hard work done by the hon. Member for Walthamstow (Stella Creasy) on this issue. She has been recognised already across the House in winning many awards for her campaigning. It is true to say that she has been tireless on this issue, on which she has achieved a huge success—at the early stages of what will no doubt be a long and distinguished career in the House.
	I want to thank the Lords for the work they did the week before last on this issue, and to congratulate the Government on listening to the concerns across the House. This issue concerns many of us on both sides of the House, even though there may be an urban myth that those of us who represent south-east Conservative seats do not face many of the concerns about deprivation and the impact that the high-cost credit industry is having on our constituents.
	Chatham has two significantly deprived areas. One problem seen by the local citizens advice bureau is an increase in the number of people from the more affluent wards in the area coming in to talk to their debt advisers. In Medway we now have average personal debt levels of nearly £43,000, which I think is incredibly high. We in Medway have therefore joined up, across all the parties, to try to provide a solution to some of the problems. First and foremost, I joined the local citizens bureau to chair an inquiry to try to establish precisely what is driving people into increased personal debt. We have done so by, rather controversially, partnering up with Wonga to do a proper survey across all the wards in the Medway authority, looking into what is causing people to increase their levels of debt. However, let there be no hesitation about the fact that, as I have already made clear, if it is payday loan companies that are driving people, particularly the more vulnerable members of society, towards debt, we shall make strong representations to ensure stricter regulation of these companies.
	The hon. Member for Nottingham East (Chris Leslie) raised what I thought were interesting issues about the definition of high-cost credit lending. One of the organisations that has not yet been debated here is the pawnbroking industry. I recently saw an advert placed outside both a pawnbrokers and a payday loan company, inviting people to take out loans of up to £50,000. It turned out that this was for businesses. I have real concerns about businesses taking out payday loans where they are securing the entire company against such credit. I recognise an asset is being secured in pawnbroking, but entire businesses could suddenly be lost if they are unable to meet their repayments.
	I have some concerns about whether this regulation will cover pawnbroking companies, as there is a bit of a loophole in the credit regulations when it comes to pawnbrokers. I would like to see us take a proper look at how pawnbroking companies are offering increasing amounts to help with short-term cash supply. Although there are some limitations and I do not think it is recommended that businesses take a loan of more than £25,000, the fact is that pawnbroker loans can go up to £100,000. It is incredibly irresponsible for companies to be lending that to businesses, particularly when it is unlikely that the businesses are going to be able to meet their repayment plans.
	I welcome the Government’s concession on this issue, which is hugely important for many vulnerable people across my constituency. I look forward to the Minister’s response to some of the questions raised, particularly on issues such as advertising and the definition of high- cost credit. I also look forward to the publication of the university of Bristol research, which I think will play an incredibly important part in how we take this issue forward for the future.

Stella Creasy: I rise to speak to amendments 78, 137 and 148, which deal with the role of the Office of Fair Trading. Before I do, I want to place on record my gratitude to Members in the other place who, along with the hon. Member for Chatham and Aylesford (Tracey Crouch) have been so supportive of the sharkstoppers campaign. I mention Lord Mitchell, Lord Kennedy, the Right Reverend Welby—I think that is the appropriate term; apologies if it is not—Baroness Howe and Baroness Grey-Thompson. They have all been fantastic in championing a measure that I know has widespread support across the country.
	I also put on record my gratitude to many organisations that have been helping make the case for action on high-cost credit, whether it be R3, the insolvency practitioners, the co-operative movement and co-operative party, Unite, Community and the thousands of concerned citizens who been involved in part of the campaign. I thank the hon. Member for Chatham and Aylesford for her kind words and for using the term “tirelessly” rather than “tiresome”, which is how some people might have interpreted the doggedness with which we have persisted in campaigning on this issue. In that sense, this amendment and the Damascene conversion of the Government to the need to act on the cost of credit is very welcome. Throughout this campaign, we have all said that when the Government accepted that we were right all along, we would be grateful and would take it within the spirit of cross-party agreement that something needs to be done about these companies and about the impact of debt on our constituents.
	With that in mind and in genuine appreciation of the fact that this moment has happened, I now want to press the Minister, as have many others, about the nature of the amendment and what will happen in the next year. Many of us are concerned that there is still a window of opportunity driven both by the delay in the implementation of these powers for the Financial Conduct Authority until April 2014 and by the continuing pressures that many in our constituencies will face, which might mean a bonzer Christmas for many of the legal loan sharks.
	We started to campaign on this issue because we could see that toxic mix in Britain of a crisis in the cost of living, of families struggling, having lost jobs or facing wage freezes in Britain and, indeed, of the lax regulation in the UK of the cost of credit. We know that those pressures have got worse, not better, for British families over the last couple of years, so we know that one in three of those families in Britain have suffered a pay freeze over the last 12 months at the same time as they have seen the cost of basics rise and continue to rise. We know that many consumers have borrowed about £2,000 on top of their secured debts—their mortgages—to try to make ends meet in the last year, but only a quarter of them have managed to pay that money back.
	The concern I bring to the House tonight is that when we look ahead to 2013, many of those pressures will not just increase, but explode over the course of the next year. The consequences for many, particularly those in the poorest communities, will be severe. We know that the pressures on the cost of living are not evenly distributed in British society. We know that the poorest 10% spend up to a quarter of their incomes on basics such as housing, fuel and energy, and we know that the prices of
	those commodities will become higher, not lower, in the coming year. Today we heard from E.ON—the last of the big six companies to announce it—about the increase in the cost of energy that consumers will face in the new year. The companies’ average increase of between 6% and 11% means that the average annual household energy bill will reach an all-time high of £1,300 next year.
	I started to campaign on this issue because I could see the impact of debt on my community in Walthamstow, in north-east London. It gives me no pleasure to say that over the past 18 months many Members on both sides of the House, representing a range of communities, have approached me to discuss cost-of living issues, but I also know that London is a harbinger of the pressures that are to come. I know, because I have seen research-based predictions that London rents will increase by 26% over the next five years, that unless we do something about the cost of credit—unless we do something to help those who are struggling with the everyday cost of living—we shall face a society in which debt is just a way of life, with all the consequences that that will have for people.
	However, this is not just about the cost of housing or, indeed, the cost of energy. It is also about the everyday cost of getting to work, which is having a great impact in my local community. I have talked to people in Walthamstow who have managed to secure apprenticeships but are forced to travel around London because there are so few apprenticeships in my area. A travelcard covering zones 1 to 3 costs £35 a week. Only people who are able to live at home can afford to take the opportunity to become an apprentice earning £100 a week, and we now learn that rail fares are to rise next year.
	Those are pressures on the working poor in our community, but so are changes in the benefits system. Given that there is no spare supply of housing, it does not take a genius to recognise that the 1,000 families in my community who have been told that their housing benefit will be capped in April will have to borrow to make ends meet and keep a roof over their heads. The pressures that the legal loan sharks have decided to increase are the pressures that the amendment seeks to address.
	It is clear that these companies are stubbornly resisting what are now widespread concerns about them and the profits they are making. Last year the industry was worth £1.7 billion in the UK; it is predicted that next year one company alone, Wonga, will be worth £1 billion, and it is just one of more than 200 companies that are now operating here. Moreover, the companies are clearly targeting young people, including students, and they have begun to change the terms of their loans. We became aware this week that Wonga is now offering what are supposed to be short-term loans on a 60-day basis. As the Office of Fair Trading has pointed out, the companies are abusing even the most basic consumer protections in the industry. That is why we need the amendment as a starting point, but it is also why we need to look at what else the OFT can do in the year ahead.
	If we allow the pressures on consumers and their cost of living to continue and do nothing to curb the legal loan sharks now, we shall see another year in which
	millions of people are pushed into debt by them. We already know that a third of payday loan users take out loans that they know they cannot repay, and that 50% of people who have taken out loans have missed a payment. Given the additional pressure that those people will face next year, it will be a disaster for Britain if we do not act, and that means that we should think about what the OFT itself can do. I hope that the Minister will tell us tonight whether he will support measures enabling action to be taken now.
	We know that the OFT will present new proposals in the new year, and that will present an opportunity for change that could set the tone for the new Financial Conduct Authority. I agree with my hon. Friend the Member for Nottingham East (Chris Leslie) and my hon. Friend the Member for Harrow West (Mr Thomas)—who is not in the Chamber now—that there should be regular meetings with the FCA to consider the industry now, but let us use the OFT to put down those markers.
	First, as was pointed out by the hon. Member for Chatham and Aylesford (Tracey Crouch), we must pin down the question of irresponsibility in lending. What is an irresponsible rate at which to lend to people? The irresponsible lending guidance should be redrafted to make clear precisely what the cap should be and precisely what constitutes consumer detriment, in terms of both duration and the amount lent and including the total cost of a loan. Secondly, it should be made clear that it is irresponsible for lenders not to use a real-time credit register and ensure that every loan is recorded.

Justin Tomlinson: The hon. Lady is delivering a categorical and passionate speech about a very important subject, and she has just made one of the most important points that can be made about that subject. Does she agree that the sharing of credit information in the UK car industry has, to an extent, transformed what was a very murky market, and that lessons can be learnt from that?

Stella Creasy: I pay tribute to the work that the hon. Gentleman has done in raising issues about debt and credit, and about the way in which companies such as this operate. We know that many of them use a get-out clause, arguing that they could not possibly have known that someone had eight or nine loans at the same time. That is partly because there is no register specifying rates of interest and the number of loans that people are taking out. The OFT should make it clear that that constitutes irresponsible lending, and that loans should be made on a real-time basis. It is no good for supposedly short-term credit to be provided on a monthly basis. I also agree with all those who have expressed concern about continuous payment authorities. I hope that, in the new year, the OFT will make it clear that we must end both the fraud and the debt that they cause.

Yvonne Fovargue: Continuous payment authorities also militate against affordability checks. As was established by the OFT’s last review, once companies know that they can dip into someone’s bank ad infinitum, they simply do not bother to carry out the checks .

Stella Creasy: My hon. Friend is right. I pay tribute to the work that she has done in this regard, and also in regard to debt management plans.
	Bad practice is widespread in this industry. The Financial Conduct Authority will have an opportunity to set the tone when it comes to the sort of consumer credit industry that we want in the future, but let us use the opportunity presented by the OFT to do something about the problems now, and to prevent 2013 from being boom time for the legal loan sharks.
	The Minister must be aware that three quarters of consumers are looking towards Christmas with severe financial concerns, and that 10 million of us in Britain feel financially squeezed. Will he state explicitly whether he will support my proposals and take them to the OFT, so that we can be certain that 2013 will be a time for legal loan sharks rather than consumers to be worried? I urge him to read the Bristol research findings—which are already in the pocket of the Department for Business, Innovation and Skills—in order to understand how measures such as this, and total cost-capping, can work, so that we can finally say that Britain is a legal loan shark-free zone.

Damian Hinds: It is an honour to follow the hon. Member for Walthamstow (Stella Creasy), and to speak in favour of the spirit of Lords amendment 78.
	The problems of high-cost sub-prime debt are widely acknowledged. Although they have come much more to the fore through opinion-formers of late because of payday lenders, they are not, of course, new, and by extension—this is somewhat at variance with what the hon. Lady said—it is not new that Government are not capping the cost of problem credit. It worries me slightly that we use the term “payday” as a catch-all shorthand for all these problems, and I hope that the Minister will reassure us that we are not just talking about payday lenders.
	Dealing with problems of this kind requires an integrated approach involving financial capability and the provision of alternatives for people who need access to credit, but it also requires regulation. Disclosure is not enough in this market, especially as it often involves very vulnerable consumers and the ready, easy availability of credit. It could be said that supply sometimes creates its own demand. Some people tend not to opt for the solution that best suits their needs, but to opt for the most recent that they have seen. In seeking to address these costs, however, we need to look at costs in the broadest sense. This is not just about interest rate charges.

Justin Tomlinson: On the question of percentage charges, if we displayed everything in cash terms it would be far easier for even the most vulnerable consumer to make an informed decision.

Damian Hinds: Yes, total cost of credit information is a good way forward—although, ironically, that would please a lot of payday lenders because, relatively speaking, they would not look quite so bad.
	This is not only about interest rates; it is also about ensuring that credit is eventually paid down, and about behavioural charges, which can be difficult to pin down under the annual percentage rate as they apply to some consumers, but not others. An APR cap on its own might seem like a panacea, but, as Members on both sides of the House realise, it is not. Unfortunately, there are ways around caps. The experience of some states in
	the United States where there has been a 30% cap on payday loans is that the rent-to-own sector gets a great boost, because money can be made in another way: by whacking up the base price of the goods.
	If there is to be a cap—and I think there can be a place for a cap—we must talk about what sort of cap it will be. I have always argued that a blunt general cap is a bad idea, because it can only be set either so high as to make no difference or so low as to put some parts of the market out of existence entirely and thereby run the risk of driving more people into the unlicensed part of the market, where someone’s idea of a late payment penalty is a cigarette burn to the forearm.
	Some people say, “Well, let’s go for a product-specific cap”, under which there would be a different cap for payday loans, home credit and so forth. That is sensible in some respects, as it acknowledges the fundamental cost drivers in the market, such as that it costs more to make a short-term loan, that it costs more in percentage terms to make a small loan, and that it costs more to loan to riskier customers. The danger is that we then get cliff edges, however, and all sorts of distortions in the market, with operators shifting around between different categories in search of the most favourable regime.
	My preference is to have a more flexible type of cap that is, in fact, more like a curve, and which can operate effectively in all parts of the market without putting any of them entirely out of business. I discussed one version of that in a debate instigated by the hon. Member for Walthamstow (Stella Creasy) in February 2011. I called it a twin-cap approach, with a cap on interest rates—30%, perhaps—and also an arrangement fee cap, perhaps of 15%. Under such a regime, it would be possible to make money in very short-term loans—what we today call payday loans—but only in a responsible manner and at a decent level, and where operators were making longer term loans, the amounts they would be able to charge would fall.

Stella Creasy: It is wonderful to hear the hon. Gentleman talking about the positive aspects of capping. I suggest he look at total cost capping, because arrangement fees is not the only issue; there are also issues to do with late payment fees and the incentive they give lenders to push people to keep rolling loans over. Like the hon. Gentleman, I want this to be a future-proof—that is a dreadful term—proposal. We must also ensure lenders cannot get around it, however, which is why we need to cover all the costs involved.

Damian Hinds: The hon. Lady is entirely right, and I alluded to that point when I talked about behavioural charges. It is wrong to think we can legislate perfectly for all eventualities in advance, however. This market has an amazing ability to shapeshift and find its way around any regulation we might put in place, as has been seen in the United States.
	I would like to hear an assurance from the Minister that under the new regime it will be possible to have a flexible capping regime that allows for all parts of the market to operate while also insisting that they do so in a responsible way. I also seek an assurance that we will not just address “payday” loans, which are a relatively new phenomenon in this country. Home credit is massive,
	and it has been with us since Victorian times, and has been a problem for quite a long time. There is also pawnbroking, as my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) mentioned. Logbook loans are a big market in the United States; they have not appeared in a major way here, but we can bet our bottom dollar that they would get a big boost if other parts of the market were capped. Rent-to-own is another area.
	On the basis of the Minister’s conversations across Government, can he assure us that the Government will continue with an integrated approach that addresses not just regulation, but boosting financial capability, starting with children’s capability with mathematics in school? Will they also continue to support operators that provide responsible credit, in particular credit unions? I pay tribute to the work the Government are doing in supporting that sector, and would like them to go further in modernising it and making credit union services more widely available, such as through the post office network.

Andrea Leadsom: I want to speak briefly on Lords amendments 25 and 36, both of which deal with the issue of competition in respect of the new regulators: the Prudential Regulation Authority that will supervise the banking sector and the Financial Conduct Authority that will supervise business conduct in the banking sector. I seek reassurance from the Minister that having regard to the quality and level of competition in the marketplace will be sufficient to drive a radical improvement in respect of the new challenger banks.
	As the Minister knows, the five oligopoly banks in the UK currently have over 80% of all small and medium-sized enterprise bank accounts and personal current accounts. That means access to finance is very limited in respect of choice and types of finance, and as bank balance sheets are currently in a difficult position, it is extraordinarily hard for small businesses to get hold of the financing they need to grow, which in turn will help our economy to recover. So the Bill gives us a once-in-a-lifetime opportunity to ensure that the regulators are, in future, incentivised to ensure not only that banks do not fail, but that we encourage new entrants to the market. At the moment, many would-be bankers find that they are set enormous hurdles, such as having to set up a dealing room just to provide evidence of their ability to do so, yet at the end of an enormous obstacle course the FSA tells them that they cannot have a banking licence. What we cannot have in the future is the PRA and the FCA combining to make it as difficult or more difficult to encourage new entrants into the market. So I hope that the Minister will set out how the regulators of the future will not only tolerate, but encourage new competition.

Greg Clark: This excellent debate has covered a number of issues that colleagues from all parts of the House feel passionately about, and correctly so because they are of huge importance to all our constituents, especially the most vulnerable in our society.
	In the short time available, I wish to address some of the points that have been made directly by hon. Members. The shadow spokesman, the hon. Member for Nottingham
	East (Chris Leslie), asked how the powers would be exercised by the Financial Conduct Authority. The powers come directly from the FCA’s remit, and he will be aware that the Bill establishes a far-reaching consumer protection objective. The overall objective is
	“securing an appropriate degree of protection for consumers.”
	The Bill goes into detail to require the FCA to consider the following: the different degree of risk to be tolerated by different types of consumers; the different needs of different types of consumers for the provision of information; and the general principle that those providing financial services should be expected to provide consumers with a level of care appropriate to their needs. I think that colleagues would recognise that this is a far-reaching objective which gives quite general powers to protect consumers, and it is right that that should be so.
	The hon. Gentleman mentioned basic bank accounts, on which some progress continues to be made. There is no universal legal right to a basic bank account, but the industry guidance still stands. It states that if a consumer asks to open a basic bank account and meets the qualifying criteria, the firm should offer them an account and that banks can refuse to open an account for a customer only where the customer has a history of fraud or is an undischarged bankrupt. Those provisions continue.

Sheila Gilmore: The previous Government had proposed creating exactly such an obligation, but the Minister’s predecessor, in a debate I had with him in Westminster Hall, refused to contemplate any such provision. Has there been any change of mind on the part of the Government?

Greg Clark: I did not have the privilege of participating in that debate, but I can tell the hon. Lady our policy. I also wanted to talk about the very important matter that the hon. Member for Nottingham East and several others raised about the transparency of the information that should be provided, as is the case in the United States, on the actual practice rather than just the intentions of lenders. This is a particularly important point, and what we have said in public—I mentioned this to the Chairman of the Treasury Committee earlier—is that the Government are working with the industry to get a commitment from the banks that they will publish granular data on their lending, particularly in deprived communities. We are meeting the British Bankers Association shortly on that. We have been absolutely clear that if we are not satisfied with that information we will use the forthcoming banking reform Bill to legislate to that effect. That will concentrate minds and I think everyone will be aware of the importance of that question.
	It is important to address the context in which we are operating. The Financial Conduct Authority must not regard itself simply as a regulator of incumbents, although it has important responsibilities in that regard. It also has the important objective that my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) mentioned, which is to promote competition. I regard the degree of competition in retail banking as unacceptable. I would like to see more new entrants and I would like them to concentrate, in particular, on reaching those parts of the market that existing incumbents find it difficult to reach. I have made it absolutely clear in the
	meetings I have had with the shadow Financial Conduct Authority that the competition objective is to be taken extremely seriously, and I and my colleagues in the Treasury will be looking for progress on that.

George Freeman: I am extremely grateful to the Minister for giving way, and I want to endorse his sentiments and those of my hon. Friend the Member for South Northamptonshire (Andrea Leadsom). Constituents in my area have come to wonder whether there is a danger of our regulating after the horse has bolted. They look to America, where there are more than 20,000 high street banks, and wonder whether we could be doing more to encourage an insurgency, as it were, of new banks to provide the high-street banking service that we need at a time when the old banks are locked up, dealing with the legacies of their mistakes. I echo the Minister’s remarks and wonder whether we can look to the Government to do anything—perhaps not in this Bill but in the coming years—to make that a reality.

Greg Clark: I completely agree with my hon. Friend. The Bill has a role to play, because it is very important that the authorities do not put insuperable barriers in the way of new banking bodies and entrants to the market that are seeking approval, because such prospective competitors could offer new services to consumers who are not well served at the moment.
	The hon. Member for Nottingham East raised questions about the scope of the FCA’s rule making. That relates to a point made by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) too, so let me confirm that the FCA will be able to make rules on the cost of credit from payday lenders, as well as pawnbrokers and any other provider of consumer credit. It is important that the FCA’s discretion allows it to protect the consumer and the consumer’s interest in all these matters.
	The hon. Member for Bishop Auckland (Helen Goodman) is not in her place, but she was concerned about the branch network, as were certain others. It is not possible or right for the Government to require particular branches to be kept open and I am sure that no hon. Member would expect that. Lords amendment 25 will require the FCA to have regard to
	“the ease with which consumers…including consumers in areas affected by social or economic deprivation, can access”
	the services they wish to use. The FCA might wish to consider that.
	The hon. Member for Harrow West (Mr Thomas) is also not in his place, but I think I have addressed his concern about whether the information provided by the banks on their practice in lending will be sufficient. I have commented on the remarks made by my hon. Friend the Member for Chatham and Aylesford, and Lords amendment 78 also applies to the lenders about whom she was concerned.
	I join the tributes paid to the hon. Member for Walthamstow (Stella Creasy), who has been energetic in pursuing this issue. She was slightly unfair to refer to a damascene conversion, as some of us on the Government Benches have always regarded the powers that were going to be invested in the FCA as necessary. We have been pleased to clarify that. She will understand that the transition to the new regime will take some time during the next year. The Chairman of the Select Committee
	chided me earlier for introducing these provisions in a hurry. It is necessary to have a degree of pace. The hon. Lady is absolutely right that during its remaining supervision of these matters the OFT in particular will have the opportunity and the power, given the amendments, to suspend a credit licence if it thinks it is necessary. The discussions that we will have, and I am sure she will have with it, will cause it to be forward-looking rather than simply regulate what has been in place so far. My hon. Friend—
	Debate interrupted (Programme Order, this day).
	The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House agrees with Lords amendment 24.
	Question agreed to.
	Lords amendment 24 accordingly agreed to.
	The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83F).
	Lords amendments 25 to 58 agreed to.

Clause 6
	 — 
	Extension of scope of regulation

Greg Clark: I beg to move, That this House agrees with Lords amendment 59.

Lindsay Hoyle: With this it will be convenient to consider the following:
	Lords amendment 60, and amendments (a), (b) and (c) thereto.
	Lords amendment 61, 62, 79, 115 to 121, 139, 140, 142, 146, 182, and 203 to 205.

Greg Clark: I come now to the Government’s implementation of the independent review of LIBOR conducted by Mr Martin Wheatley. I announced the Government’s response to the Wheatley review in mid-October and three sets of amendments to the Bill have been made to implement those recommendations that require legislation. The first is to enable activities in relation to benchmarks, such as LIBOR and potentially others, to be brought within the scope of regulation under FSMA. The second is to create criminal offences designed to tackle misconduct in the financial sector, including a new criminal offence for making false or misleading submissions in connection with the determination of a benchmark. The third is to provide the FCA with a rule-making power to require banks to submit to LIBOR and other benchmarks. Those amendments complement the market-led reforms to LIBOR as recommended by the Wheatley review. Martin Wheatley recommended that submission to, and the administration of, LIBOR become regulated activities, and amendments 59 to 62 create a framework to enable activities in relation to benchmarks to be specified as regulated activities under FSMA.
	Amendment 60 defines “ benchmark” as an “index, rate or price”, defined from time to time by reference to the state of the market and used in relation to investments. A benchmark is capable of being regulated only if it meets that definition. The precise benchmarks that are
	subject to regulation will be specified by way of statutory instrument. The Government recently published a consultation paper on this legislation. Initially, the activities to become regulated will be LIBOR submission and administration, as recommended by the Wheatley review. However, further benchmarks can be added and the Government are considering and consulting on whether additional benchmarks should be brought within the regulatory perimeter. The types of benchmarks that could be eligible include equity or bond indices, derivatives and commodity or energy benchmarks. The definition of benchmark, as drafted, requires that it be used for one or more purposes that relate to section 22 of, and schedule 2 to, FSMA.
	The hon. Member for Nottingham East (Chris Leslie) has tabled an amendment that would extend that definition to include commodities. Let me say first that I totally understand the requirement that we should be able to address some of the alleged abuses that have taken place and have the powers in statute to include those benchmarks that are relevant to some of the concerns that have been expressed recently. We do not believe that there is any requirement to extend the legislation on that. In fact, the Bill was drafted to anticipate the Wheatley review and the work going on in other benchmarks. Benchmarks can represent many things, including commodities or energies, provided that they are traded financially in the way we often see. Under the definition, regulation by the FCA extends to benchmarks that involve financial matters consistent with FSMA and the objectives of the FCA as the financial services regulator.
	The Wheatley review also recommended that banks should be encouraged to participate in LIBOR—participation is currently voluntary. In the absence of such submissions, LIBOR would cease to be a representative benchmark and, in an extreme scenario, would not be published at all. Therefore, Lords amendment 79 allows the FCA to require firms to participate in particular benchmarks, while making reference to a “code or other document”. That allows the detail of the requirement to be determined by the benchmark administrator, not by the FCA. It might not be necessary for the FCA to use that power immediately, if at all, and it has recently opened a discussion on how and when the use of that power could be considered.
	The Wheatley review also recommended the creation of a new criminal offence in relation to the manipulation of benchmarks such as LIBOR and the re-examination of the criminal sanctions for market manipulation under FSMA. Although such conduct could already be a criminal offence under legislation, this is a helpful clarification of some of the powers. There will be three criminal offences: first, we are re-creating the offence of making a false or misleading statement; secondly, we are widening the offence in section 397(3) to include creating a false or misleading impression as to the market in, or the price or value of, an investment for the purposes of making a profit or avoiding a loss; and thirdly, we are creating a new criminal offence related to misleading statements and impressions in respect of specified benchmarks.
	The amendments also replicate the penalties for existing offences: a person found guilty might face a prison sentence of up to seven years and an unlimited fine. The
	detail of the investments, agreements and benchmarks for which those criminal offences apply will be set out in secondary legislation. That is included in the public consultation currently under way.
	Under the current arrangements, where enforcement action results in a firm paying a financial penalty, that is applied as a discount to fees paid by other firms the following year. Without reform, unprecedented fines, such as those relating to the attempted manipulation of LIBOR, would have represented a significant windfall to regulated firms. In future, regulatory fines revenue in excess of enforcement case costs will go to the Consolidated Fund. The hon. Member for Nottingham East and I had an exchange about that earlier. The regulators will be able to net off enforcement case costs before handing over the penalties to the public purse. The new arrangements will apply to FSA fines received from 1 April 2012, so the measure will include the penalty imposed on Barclays in relation to the attempted manipulation of LIBOR.
	The Government have announced that £35 million of fines imposed from attempted LIBOR manipulation and other unacceptable behaviour received this year will be used to support Britain’s armed forces community. In addition, £5 million will go to the creation of new, groundbreaking first world war galleries at the Imperial War museum. I hope that the House will agree to these amendments but, of course, I stand ready to respond to any points Members make.

Christopher Leslie: We have moved on to another series of amendments that have arisen largely as a result of the scandal that was discovered this summer, when it was found that some of the largest banks—obviously, we have heard about the concerns in relation to Barclays—had been manipulating LIBOR, the benchmark from which flows billions, if not trillions, in financial services products and investments worldwide.
	The scandal had massive ramifications across the banking sector. It was as though having gone through three or four years of attempted reform following the global financial crisis, after which it was clear that the risks that many in the banking sector had been taking were not properly understood or accounted for, the sector was again knocked sideways. It turns out that it was not just about exuberant risk-taking; it was, in fact, about corrupt manipulation of what people had thought was a trustworthy index. What is worse, it hit the reputation of the City of London in particular. It was all in the name: the London interbank offered rate. This was taken by many other international financial centres to be a moment of weakness for the UK financial services sector, and we saw several examples of other jurisdictions taking action swiftly to capitalise on the disarray in which many in the financial services sector found themselves. It was therefore important that the Government took urgent action and commissioned a review of what happened in the LIBOR scandal.
	At the time, we felt that the matter was of such significance that we called for an independent judicial inquiry into the whole question of banking standards and ethics. As I am sure you will recall, Mr Deputy Speaker, we had a very heated debate in which the Government said, “We’ll have a parliamentary banking commission,” while we said, “Go for an independent judicial variant.” Of course, the Government won the day, and hence the Chairman of the Treasury Committee
	is now demonstrating his stewardship of that commission, which is due to report shortly. I hope that it has an opportunity to look into the wider issue of ethics and standards in banking. The Government have been keen that it starts to focus, almost in pre-legislative mode ahead of the banking reform Bill, on the Vickers reforms, but these questions of standards, ethics and culture also matter tremendously.
	The Government made several amendments to the Bill in the House of Lords. In amendment 79, it is envisaged that there will be new provisions for a benchmark administrator, but it is not certain that a private sector organisation, even if it has a certain amount of experience, will be totally immune from conflicts of interest. Did the Government give any consideration to establishing a more independent body or entity for that administrative process? It is vital that the process of finding a new benchmark administrator is open and transparent. Will the Minister give more details about the process that he is undertaking and how the tender process is happening?
	On amendment 115, it is important to ensure that the new criminal offences have a strong effect in respect of misleading statements on benchmarking and in general. In terms of its jurisdiction, is the amendment limited to British banking and financial services activities, or does it cover activities undertaken by UK organisations or UK-approved persons in operations in countries beyond our shores? Clearly, in a globalised world, that is relevant to how we see the behaviour of those in the sector.
	The Government’s proposals to regulate benchmarking currently apply only to investments. We want to ensure that the regulatory net is also cast around commodities, including oil trading, gas market trading, silver, gold, foodstuffs, and so on. I am sure, Mr Deputy Speaker, that you can think of a range of potential commodities. Therefore, in the marvellous parliamentary way in which we do these things, we are seeking to amend a Lords amendment to ensure that the definition is focused not only on investment but, for clarity’s sake, puts commodities into the Bill. The Government say that they are consulting on this arrangement and might have the power to include those things later down the line but do not believe that there is a requirement to do so at this stage. However, it is time that we got ahead of these issues early on.
	In the Public Bill Committee in March, after several hours of debate—it had been a bit of a long day—I asked the Minister’s predecessor, in relation to LIBOR and the benchmarking of these arrangements, “Do the Government have a view about whether there is manipulation and whether changes need to be made to the regulatory arrangements?” He stood up and answered with the single word, no. Of course, he came to regret that stance and several months later—I think it was in June—we learned that a tremendous scandal had taken place. If we have these legislative vehicles, it is important that we take the opportunity to deal with any potential issues.

Alison McGovern: My hon. Friend mentioned ethics a moment ago. Although we need a financial services system that is internally ethical and that has the right culture, there is a broader problem. The LIBOR scandal bit in the way it did not because it was a usual Whitehall story, but because the Government rely on LIBOR, among other indices, to know what is going on in financial
	services. This might not be the part of the Bill that has been most hotly debated this evening, but we are all reliant on these indices. Is that why my hon. Friend is suggesting that we should cast the net a little wider and try to get ahead of the problem rather than constantly chase ourselves?

Christopher Leslie: My hon. Friend makes an excellent intervention. She is right. In our debates about financial services we sometimes talk in rarefied or esoteric technical terms, but this issue is certainly of relevance to all our constituents, whose mortgage rates, the interest they pay on loans, and, in the case of oil markets, the price they pay for petrol at the petrol station and the price they pay to heat their homes, as well as prices in the gas and food markets—the price of a loaf of bread, for example—are all too often rooted in the costs of these commodities and investments, as determined by the global trading environment.
	This is what it boils down to: it is a question of trust. Hitherto, people assumed that all the market benchmark arrangements were simply transparent exchanges of data and prices that showed the true value of an investment, product or commodity, and that people were buying and selling in an open and fair process. It turned out that those in the know, who were often highly paid traders in the bigger banks—incidentally, even more revelations will come out over the coming months about the banks that might have been involved in LIBOR—knew how to wangle the system and play the market in a way that helped not only the profits of their particular company, but that boosted their own personal bonus arrangements. It was a question of using other people’s money in order to shift massive volumes of trades. Even if the changes in price were fractional and seemed irrelevant, when they were multiplied by the billions of trades that were taking place they could have massive financial advantages to those traders involved.
	It was alleged recently that banks rigged electricity markets in the United States and record fines have been issued. That involved British institutions, so British regulators should be explicitly equipped to tackle attempts to rig commodities trading, whether it be spot trading, forward contracts, futures contracts or hedging arrangements. Global commodities markets include a vast range of products, such as grains, fibre, other food, precious and industrial metals, energy, carbon offsets and so on.
	As I have said, British households are affected by commodity market manipulation—perhaps even more than attempts to rig LIBOR. Commodity speculation has contributed to the record costs of staple foods in recent years. In fact, some people argue that the riots and social unrest in Egypt, Tunisia and other countries were influenced by pricing issues and distortions.
	Last month, after the Energy Secretary made a statement to Parliament, the Financial Services Authority and Ofgem confirmed that they were conducting an inquiry into claims that British companies manipulated the wholesale gas market on 28 September. The Government have said that it would not be appropriate to use legislation to cover pure commodities, such as gas, but that if commodities are referenced by derivatives or other financial instruments, it is covered by the definition of investments. However, a derivative instrument may essentially be a traded instrument and there is no
	reason for it to fall within that definition. It could be regarded as an insurance product and so does not fall clearly within the definition if investments in Lords amendment 119.
	Total, the French oil company, recently made open allegations against one of the PRAs. That is not the PRA as we know and love it—the Prudential Regulatory Authority—but another acronym. Price reporting agencies are companies or organisations that essentially gather information, almost as a journalist might do, and figure out broadly what is happening in the market. However, it is not necessarily a true reflection of what is happening. Total alleged that there were erratic processes involved and that it was not a true reflection of the state of the market. There were also questions over the methodologies of the price reporting agencies. Does the Minister think that price reporting agencies need to be within the regulatory ambit? Again, they are important component players in the financial services sector, but are not familiar to all our constituents—but by goodness, they would become familiar to all our constituents if they were not trusted or were seen to be failing in some way.

Mike Freer: Much commodity trading is still focused on trading on the floor, rather than on the screen. Does the shadow Minister not accept that as the trend moves towards trading on the screen, that should drive transparency? Should we not let the transparency of the market work first, before we rush to regulate?

Christopher Leslie: I do want to see more transparency. Electronic data exchanges certainly have the potential to provide the regulators, including the Bank of England, with more real-time transactional information about what is actually happening. I do not necessarily want to see regulators wading through reams of information, but I want to ensure that, if needs be, they have the scope to act. It is not clear that the Financial Services Bill, as it first entered Parliament in February, would have captured the LIBOR benchmarking situation within the regulatory perimeter. There were suggestions from the FSA that it was not something that it could deal with. That was not good enough and the Government have come forward with amendments. I want to ensure that those amendments allow the regulators to trigger inquiries and oversight for all benchmarking indices and arrangements, especially in the commodities market.
	The hon. Member for Harlow (Robert Halfon), who has been campaigning on oil and petrol prices, has called for an OFT and FSA investigation into manipulation by oil firms in recent times. The United States Commodity Futures Trading Commission has raised questions about price fixing and manipulation in the silver market. That study was inconclusive, but questions linger over metals markets more broadly. The Minister’s good friend, the European Commissioner for Internal Market and Services, Commissioner Barnier, has suggested that all commodity indices should be covered in this way. Rather than waiting for European regulators to ensure that this happens, why do we not take this opportunity to deal with the issue?
	We should not just say that benchmarking means investments; it is vital that we put it beyond doubt that the question of commodities is included. It is a stitch in time to ensure that we cast the regulatory perimeter correctly. I commend amendments (a), (b) and (c) to Lords amendment 60 to the House.

Alison McGovern: I promise not to test your patience, Mr Deputy Speaker, or that of the House by speaking for too long. Some, I know, will be of the view that indices and benchmarks are dry, dull, technical subjects—[Hon. Members: “Never!”] Hon. Members may say that, but I suspect them of sarcasm.
	I begin with an explanation of why I think this part of the legislation so important, and why the amendments tabled by my hon. Friend the Member for Nottingham East (Chris Leslie) are crucial. In my view, they relate directly to the subject that currently fills our newspapers and television screens—the indignity and horror of food banks. The reason my constituents, and those of other hon. Members, cannot just pop to the shops and buy food is because food costs more than the amount of money in their pockets. In the long term, the answer to that problem is not charity—grateful though we are for those efforts—but a food system that provides sustenance for people to buy in shops at a price they can afford. Price is not a technical, dry issue that ought to be left to economists in the academy; it should be of importance to every family, as I know it is to every MP.
	Food prices unite those who are finding life difficult at the moment both at home and far away. Although I applaud the efforts of those who try to help people out, in the end we must seek a better solution. Whether we like it or not, since the 18th century this country has taken part in global trade. We had a strategic role in that which I will not bore the House with, but part of it means that we, more than others, have a special responsibility to understand global trading systems, not least the one that ensures there is enough food for us to buy here at home, and that farmers in this country and far away get paid a fair price.
	This morning I was with the UN Secretary-General’s special representative for food security. He described two current problems in the commodity market that I hope will help people to realise why we must understand that phenomenon. First, global food prices are currently extremely volatile. Secondly, although prices are moving sharply up and down, they are trending upwards. That means that those most vulnerable to the price change in that commodity face an ever-worsening scenario as they try to feed themselves and their families. How can benchmarks and a better understanding of the data help? Well, when we understand those movements we can try to find out what is behind volatility in global prices.
	Briefly, let me take hon. Members back in time to about 2005 until the end of 2007. Economists around the world were busy writing papers on derivatives and what we now call shadow banking, and saying that sharing risk in that way was a good idea and helped to manage investment and the finance markets globally. We now know that facts and information were available that we could not see, and my question concerns what is going on now that we cannot see, specifically in relation to food prices. Is there an issue with derivatives based on commodities? My hon. Friend has already given some indications of why we might think that.
	The UN has done some work, and some academics around the world think there is a problem with derivatives based on commodities, and that just as sub-prime markets were an unseen problem for too long, there may be problems now that we cannot see. That is what makes benchmarks and indices so important. We need verifiable, trustworthy numbers that we can investigate to ascertain what is happening in global food markets. As I have said, this is not a techie, dry subject that matters only to economists and those who pore over numbers; the reality is that it matters to every one of our constituents, but most especially to those with the least money to spare.

Sheila Gilmore: Will my hon. Friend reflect on the fact that trading in commodity derivatives can skew investment and whole industries if not properly regulated? For example, I visited the jute museum in Dundee, where one display made the point that the jute lords made more from trading in futures than they made from production. That might have made them less interested in diversifying their manufacturing industry, which has completely died.

Alison McGovern: I thank my hon. Friend for that highly appropriate intervention. When the history of Great Britain is written, it will show that that part of the east coast of Scotland has had a great influence on economics throughout. The example from Dundee is a good one.
	All hon. Members look back at global financial trading and markets and wonder how we got to the situation we found ourselves in. When the shadow banking market and complex derivatives and products were created, people became much more interested in them than in the real economy and the fundamentals of our economy. They saw the financial system as a servant to the rest of the economy rather than the other way around. I hope that view is shared broadly on both sides of the House. The Minister is nodding, but I am not entirely sure he agrees with that specific point. I will live in hope and imagine he does.
	When the Minister is consulting on whether to broaden the Bill’s reach from the indices that I have mentioned to commodities, will he consider the impact of escalating food and oil prices not only on his constituents and mine, but on those who live closest to the extreme poverty line in the poorest countries? Will he consider the price of maize and wheat in very poor countries, where there is no social support system and no welfare state security net of the sort we have in this country? Will this country take a leading role in properly understanding what is happening in that market?

Geoffrey Clifton-Brown: To use the increase in food commodity prices as an argument for increased control over derivatives trading is a little far-fetched. Surely increased prices have much more to do with the increased world population and the weather than they have to do with commodities trading.

Alison McGovern: As I have said, this morning I listened to a presentation from the UN Secretary-General’s special representative on global food security. We discussed the matters that the hon. Gentleman mentions, but there was strong interest in whether the trading of commodity derivatives has played a role or had an impact in increased
	prices. The hon. Gentleman may suggest that its effect is negligible, and I would be happy to see any evidence he can forward to me. As I try to understand the phenomenon, I am happy to look at numbers and think about the evidence. I am an empiricist if nothing else; we should always consider the evidence. One of the problems to date, however, has been the availability of information, and making it clear and evident for all to see. I have tried to make the point that people looking at the world economy could not, for specific reasons, necessarily see the problems relating to sub-prime mortgages. As my hon. Friend the Member for Nottingham East has suggested, we should try to get ahead of the problem and ensure that there are no longer problems that we simply do not see.

Gordon Birtwistle: The hon. Lady is making a good point, but did the person whom she met this morning give her alternatives to the derivatives and commodities markets? The worldwide food supply is decided by commodities buying. There is a drought in America, so the price of wheat goes up. There is heavy rain in this country, so we have problems ourselves. There are problems in Bangladesh and all around the world that push up the price of food. The same is true for oil; when there is a shortage of oil, the oil price goes up. Did the gentleman whom she spoke to this morning provide an alternative to what we have now? Maybe we could look at it and come up with some suggestions ourselves.

Alison McGovern: I thank the hon. Gentleman for his intervention and his compliment that he thinks my point is not wholly without merit, but it might test your patience, Mr Deputy Speaker, if I tried to shoehorn into the debate on the amendment possible solutions to the global food crisis and productivity in agriculture.
	On derivatives, in agricultural production there is a need to hedge. There needs to be some kind of financial security to take account of unforeseen weather events and so on, so of course there is a need to hedge, but that is not what I am talking about. The question is whether some of the recent high-volume, high-speed forms of speculation and trading have had an impact on the global food price. I suspect that they might have, but it would be nice to have more information.

Mark Durkan: When some of us raised these issues in the previous Parliament, the then Government pooh-poohed the whole problem of speculation in relation to derivatives and so on. Does the hon. Lady share the concern that, as banks, hedge funds and all our pension funds try to work their way towards replenishing themselves after the crisis, there is a danger that they will go back to the bad ways of speculating in all sorts of commodities? Does she think the Government should prioritise this issue during their G8 presidency next year, and discuss with other Governments how to circumscribe the capacity of financial institutions to play dangerous games with this sort of speculation?

Alison McGovern: I thank the hon. Gentleman for his intervention, which was characteristically well made. I share his fear, and his point about the G8 is absolutely correct. It will be great to have the G8 summit in Northern Ireland. I am sure that the Minister has heard the hon. Gentleman’s point and will duly feed it back to the Prime Minister, because there is no doubt that it is important.
	In conclusion, underlying what we are trying to achieve is a financial system that has appropriate oversight. Given the importance—we now this know—to our everyday well-being and comfort of what appear to be financial technicalities and bits of information that people do not necessarily connect with the realities of life, I hope that the Government will pay the most careful attention to the results of the consultation on commodities, because we might have a genuine opportunity to set in train rules that will help us to spot the awful crashes and difficult phenomena of the future.

Greg Clark: It is a pleasure to respond to this short but important debate.
	The hon. Member for Nottingham East (Chris Leslie) referred to the heated exchanges before the summer. They were necessarily heated because they concerned a major scandal that did great damage to the country’s reputation. The whole House feels strongly about this matter because the industry is vital to the country’s economic future. About 2 million people are employed in the financial services and related industries, most of them in capacities far removed from the ability—and still more the inclination—to engage in the kind of behaviour that came to light in the LIBOR scandal. It is a particular source of outrage that many ordinary working people across the UK with careers in the banking industry have been besmirched by the behaviour of people far from them. As a result, in their ordinary working lives and in conducting their activities, they found themselves bracketed with people who were shaming an industry that they were proud to work in—an industry associated with high standards of sobriety and propriety—and it is particularly important that we act decisively and firmly against the perpetrators of the manipulation that came to light in the summer.
	The amendments do precisely that. All Members will recognise the pace with which we have responded, given that the allegations came to light in late June. We immediately asked an independent reviewer, Martin Wheatley, to look into the allegation. He conducted his work over the summer and reported in September. The Government considered all his recommendations and have adopted every one of them. The fact that we are here, in early December, reaching the final stages of legislation to act on those recommendations shows that the Government and the House have taken the allegations very seriously and are acting to restore the reputation not only of the City of London, but of the financial services industry in this country. I hope that the world will see that, when something comes to light that objectively is scandalous, we will not stand by and watch it happen, but will take legislative action immediately.
	I shall refer to some of the points made by the hon. Members for Nottingham East and for Wirral South (Alison McGovern). Let me deal first with the independence of benchmark providers. There are, of course, lots of different benchmark providers, not all of which—it is important to say—were associated with the problems that LIBOR and the British Bankers Association had. The Wheatley review recommended that the BBA step aside from setting LIBOR. Future administrators, which may be private, commercial or otherwise—there is no restriction—will be subject to the type of regulation
	powers contained in these amendments. On LIBOR specifically, the tender committee chaired by Baroness Hogg is in its early stages. We will of course update the House on the progress it makes when it considers who will operate the LIBOR benchmark in future.
	The hon. Gentleman asked whether the powers in the amendments will be restricted to the UK or whether they will cover other jurisdictions. The answer is that there needs to be some connection with the UK, as might be expected under legislation passed by this Parliament, but the amendments take a broad approach to the term “connection”. There will be a sufficient connection if, for example, a statement that could have contributed to the manipulation of benchmarks was made in or from the UK, if the person at whom it was aimed was in the UK, or if there were an agreement or conspiracy that such activity would be entered into in the UK. We take a broad view of that. He also asked whether the Bill was wide enough to bring PRAs—price reporting agencies, rather than the Prudential Regulatory Authority—into regulation. The answer is yes, through the secondary legislation that is provided for by the Bill. Where PRAs are used in relation to investments, including derivatives, futures and options, they will be included.
	The hon. Gentleman asked whether the powers should explicitly consider commodities. Let me make it absolutely clear that there is no question whatever but that it should be possible to include benchmarks such as those in the gas or energy markets. The consultation provides for that and it is precisely what Martin Wheatley’s report envisaged. Where benchmarks are used for financial investments and financial transactions, it is right that they should be vested in that way, but it would be wrong simply to vest powers for the regulation of every commodity in the Financial Conduct Authority, because commodities can represent many things. The term “commodities” is broad. We would not want the Financial Conduct Authority to regulate benchmarks relating to trading in live cattle or lean hogs, for example, even though they may fit the definition of “commodities”. The current definition means that the regulation of benchmarks by the FCA extends to all the benchmarks that involve financial matters, as is consistent with the Financial Services and Markets Act 2000 and the objectives of the FCA as a financial services regulator.
	For that reason—this has been considered in the other place as well as this place—the powers that we are taking have not just LIBOR in mind, but the other benchmarks that could give rise to similar concerns and which in recent days have done so. The criminal offence will pertain to those benchmarks as well as LIBOR. They will ensure that investors, whether in this country or around the world, can have confidence that we have the fullest possible regime of sanctions to prevent and govern any demonstrated misconduct or attempted manipulation of LIBOR.
	Let me say a little about the comments that the hon. Member for Wirral South made. She talked about her concerns about the use of derivatives in food commodities in particular. The use of derivatives in food markets can achieve precisely some of the advantages that she talked about—that is, enable farmers, whether in this country or around the world, to get investments into expanding production in anticipation of future demands. The process
	brings forward into the present day the needs of the future; that is what futures markets are about. It is important that farmers in this country, but also around the world, who might not have access to capital can make those connections, so that they can supply in advance what will be required in the future. There is some research, which I would be happy to share, on the contribution that derivatives have made to ensuring adequate food supplies not just in this country but around the world.
	I shall conclude by saying that the regime that we are putting in place will provide a swift and robust response to the totally unacceptable set of practices that was unearthed before the summer. We have moved further and faster than any other jurisdiction in the world, and I hope that the House will see fit to approve the provisions tonight so that we can move forward and demonstrate to the world that this is the best jurisdiction in which to trade.
	Lords amendment 59 agreed  to .
	Amendment (a) proposed to Lords amendment 60.—(Chris  Leslie .)

Question put, That the amendment be made.
	The House divided:
	Ayes 200, Noes 266.

Question accordingly negatived.
	Lords amendment 60 agreed to.
	Lords amendments 61 to 97 agreed to.

Mr Speaker: With the leave of the House, I propose to put Lords amendments 98 to 290 together.

Christopher Leslie: Amendment 98 is in a separate group relating to clearing houses, and I would like to make some remarks.

Mr Speaker: The Minister will need to move amendment 98, and can do so.

Clause 27
	 — 
	Powers in relation to recognised investment exchanges and clearing Houses of Parliament

Greg Clark: I beg to move, That this House agrees with Lords amendment 98.

Mr Speaker: With this it will be convenient to consider Lords amendments 99, 122 to 127, 224 and 225.

Christopher Leslie: I would have thought the Minister would have wanted to speak, as Lords amendment 98 is the lead amendment of a group relating to the extension of resolution schemes from banks and building societies to investment firms and in particular UK clearing houses. There is a wider set of issues, therefore.
	UK clearing houses stand between two parties in a trade, ensuring that a deal goes through in the event of one party defaulting. Once a deal is agreed, the transaction is honoured even if one party goes bust.
	The Government’s decision to extend a set of resolution arrangements to clearing houses is incredibly important, as the debates in the other place set out. Clearing houses are highly significant entities nowadays. After the 2009 G20 summit, it was clear that several hundred trillion dollars of market transactions, especially in over-the-counter derivative arrangements, were part of the clearing house ambit. Therefore, a failure in a clearing house could clearly mean a big problem—a series of problems—for the financial services sector more broadly.
	I have a series of questions for the Minister, as I would be grateful for his help in respect of the provisions of this amendment and others in this group. First, I want to ask him about today’s Financial Times, the front page of which talks interestingly about the extension of resolution plan arrangements from covering just companies within the UK to an agreement between the United States and the UK that the Bank of England seems to have struck which will mean, for the first time, that there is a template for larger, serious, significant international financial institutions to have resolution arrangements that span across borders. Clearly that is relevant to these amendments on clearing houses. [Interruption.] I can tell that hon. Members are very familiar with these arrangements. Clearing houses have a great deal of cross-border interoperability, they cut across jurisdictions and there is a need to co-ordinate their work. Will the Minister assure the House that steps will be taken to ensure that international efforts are made to promulgate resolution arrangements that also cut across borders for clearing houses?
	Central counterparty clearing arrangements these days contain a requirement also to hold Government bonds as collateral. As we know, Government bonds are not what they once were; there have been some questions about their safety. The Minister needs to explain: are we guarding against the deterioration of standards in central counterparty collateral arrangements? If we are increasingly reliant on gilt-edged securities of an international variety, are we actually ensuring that there is sufficient strength behind our central counterparty clearing arrangements?
	Finally, may I ask the Minister a further question? Basel III arrangements will be ensuring that banks that are members of clearing houses need to capitalise their exposure to central counterparty contingent liabilities. Can he just give us a sense of the impact on the UK
	banking system, particularly on its capital adequacy, of processes that will see a rapid change on central counterparty arrangements from an over-the-counter arrangement to an exchange-based arrangement? If the regulators are insisting more and more on exchange-traded arrangements in those clearing houses, there will be an imperative for those clearing houses to become more and more price sensitive and they will be more desirable for the market more generally. That is why we are seeing so many mergers and acquisitions of clearing houses. Are these costs eventually going to be finding their way on to customers and our constituents? I would be grateful if the Minister replied.

Greg Clark: Let me give a bit of context to amendments 98 and 225. Taken together, they make provision with regard to the Bank of England’s role in insolvency proceedings relating to a UK clearing house. The amendments will ensure that the Bank of England is put on notice of any application for administration in respect of a UK clearing house, of any petition for a winding-up order in respect of a UK clearing house, of any resolution for the voluntary winding up of a UK clearing house and of the proposed appointment of an administrator of a UK clearing house. That will give the Bank the opportunity to consider whether to exercise a stabilisation power provided for in part 1 of the Banking Act 2009 in order to minimise the impact of the clearing house’s failure on financial stability. Amendment 225 gives the Bank of England the power to direct insolvency practitioners appointed in relation to a company that is or has been a UK clearing house. The direction would operate without prejudice to the existing statutory requirements relating to company insolvency.
	The financial crisis of 2008-09 highlighted many deficiencies in the regulation of the global financial system. Most importantly, we found that the disorderly failure of systemically important banks could have catastrophic effects on the stability of the UK and international financial markets.
	The hon. Member for Nottingham East (Chris Leslie) mentioned the piece that featured in the Financial Times today, which was a joint paper, in effect, between the Bank of England and the Federal Deposit Insurance Corporation on plans for resolving global systemically important financial institutions. The Bank of England and FDIC paper is a perfectly proper collaboration between brother regulators across the world and is exactly the sort of approach we would expect regulators to take to make the financial system safer. It should be seen as part of the wider international and European work to deliver a credible resolution regime for the biggest banks and for—
	Debate interrupted (Programme Order, this  day ).
	The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83F), That this House agrees with Lords amendment 98.
	Question agreed  to .
	Lords amendment 98 accordingly agreed to.
	The Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No.  83F ).
	Lords  amendments 99 to 290 agreed to, with Commons financial privileges waived in respect of Lords amendments 122, 125 to 128, 138 to 140, 146, 182 and 203.

Business without Debate
	 — 
	Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Representation of the People

That the draft Electoral Registration Data Schemes (No. 2) Order 2012, which was laid before this House on 30 October, be approved.—(Greg Hands.)
	Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Single Market Act II

That this House takes note of European Document No. 14536/12, a Communication from the Commission: Single Market Act II - Together for new growth; and supports the Government’s aim of prioritising growth enhancing measures.—(Greg Hands.)
	Question agreed  to .

Business of the house (12 December)

Ordered,
	That at the sitting on 12 December, notwithstanding sub-paragraph (2)(c) of Standing Order No. 14—
	(1) opposition business may be proceeded with for three hours, and shall then lapse if not previously disposed of, and
	(2) the backbench business set down for consideration may be entered upon at any hour, may be proceeded with, though opposed, for three hours, and shall then lapse if not previously disposed of.—(Greg Hands.)

Environmental Audit

Ordered ,
	That Ian Murray be discharged from the Environmental Audit Committee and Chris Evans be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

committees

Mr Speaker: With the leave of the House, we will take motions 9 to 11 together.
	Ordered,

Justice

That Chris Evans be discharged from the Justice Committee and Andy McDonald be added.

Public Administration

That Michael Dugher be discharged from the Select Committee on Public Administration and Mr Steve Reed be added.

Transport

That Julie Hilling be discharged from the Transport Committee and Sarah Champion be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

SCHIZOPHRENIA CARE

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

Charles Walker: Let me start by saying that I am a great enthusiast and a great optimist. I enthusiastically believe that in the area of schizophrenia we need to do more of what we do well and less of what we do badly—more of the good stuff and less of the bad stuff. I pay tribute to the fantastic men and women who work in the NHS in mental health; they are the unsung heroes. It is not the glamorous end of the NHS but it is, perhaps, the most important.
	I want this to be an upbeat speech—I really do—but I think that at the beginning we must focus on what we do badly. First, I am very concerned at the fact that the life expectancy of someone who has a diagnosis of schizophrenia or psychosis is up to 20 years less than that of someone who does not have that illness or disease. I do not believe that that is acceptable in a first-world civilised society; we cannot tolerate it any longer. I am concerned that young and middle-aged men and women around the country who have a diagnosis of psychosis and who live with schizophrenia might well end up smoking 60 or 70 cigarettes a day, gaining huge amounts of weight and living pretty desperate lives. Their drug therapies cause them to feel pretty miserable and disconnected, and that is why we end up in this terrible and desperate situation of such a lowered life expectancy.
	Secondly, we need a system in which people are not frightened. Being ill is not a pleasant experience. People are naturally fearful, but too many people suffering from psychosis or schizophrenia are very scared and very frightened far too much of the time. That is very upsetting for many people. It is upsetting for them and for their friends and families, and I am afraid it is upsetting for those of us who observe this going on and want to change things. Again I say, we are a first-world society and we cannot have people feeling frightened and separate.
	Thirdly, we lock up far too many people who are ill. There are 7,000 people in secure units, many of whom should not be there, but we do not know how to get them out. We do not know how to take them out of a secure unit and reintegrate them into society. Those processes are not in place, so we remove people’s liberty, sometimes for their own good to stop them harming themselves, and in the most extreme cases to stop them harming others. But we must ensure that when they are in these places they feel safe and secure and that the systems are in place to enable them to return, as far as possible, to mainstream society.
	Finally on the bad things that we must stop doing, only one in 10 people who are diagnosed with psychosis or schizophrenia are in work. We have an unemployment rate of 92% and we all know in this place that employment is the route to fulfilment: being in a career with friends and colleagues, having a sense of purpose, being able to get up in the morning to go to a place that is welcoming and to which we want to go.
	Let us now be upbeat. What we need is a manifesto of good things. We need more and earlier interventions, because the quicker we can deal with a problem the
	more chance there is that it will remain manageable and the less likely it is to escalate to something far more serious. That is why we need early interventions.

Brooks Newmark: I appreciate that I did not speak to my hon. Friend about his debate, but I have been listening to him and I congratulate him on holding the debate. Does he agree that another bad thing that happens with schizophrenia is that people are left to roam the streets and end up homeless, and that a huge number of people are afflicted by schizophrenia and other mental illnesses with whom we need to deal?

Charles Walker: My hon. Friend makes a very good point. I have had an extremely good paper from St Mungo’s dealing with that very issue.
	We also need to do more listening. We must stop talking over people who suffer with psychosis or schizophrenia. They are warm, live human beings. They exist. We tend too often to talk over them and about them, not to them. Certainly there will be times when they are in crisis, but when they are, we need a crisis plan so that they can tell us how they want to be treated, looked after and cared for—how we can help to secure their dignity. Then we need to ensure that they have advocates who can sit alongside them and be their voice—someone they trust at a time of crisis, illness and distress.
	We need more support for carers—the people who love them, the people who stand by them day in and day out, trying to do the right thing, trying to get them the care that they deserve and require—their champions. Let us not forget in this place the important role that carers play in being the champions. We need much more talking and listening to carers, involving them in the process. They will know so much more about the individual being cared for than probably anyone else.
	Then we need to provide more training for people working in the mental health arena. It is a demanding environment. In the acute settings people tend to be admitted who are very ill. The threshold for admittance is so much higher now. The staff need to be trained to deal with and to care for these people. It is no reflection on the staff that I am asking for this. I want to stand shoulder to shoulder with the staff. We want to stand alongside them and help them to deliver the care that they want to deliver, and that their professional pride demands that they deliver.

Robert Halfon: I congratulate my hon. Friend on securing the debate and on his knowledge of the subject. He talks about early intervention. I recently visited the North Essex Partnership NHS Trust, which works on mental health. It puts people into schools to identify children and young people who are developing such problems, which has a huge impact and manages to stop more serious problems developing later.

Charles Walker: My hon. Friend makes an excellent point on early intervention. It is about getting there before the crisis occurs and making sure that people who are at risk have the support they need to manage their illness so that they end up in a good place, not a frightening place.
	We need more peer support. When someone goes through a mental health crisis, many people tell them that it will get better, but they might not be believed, as things can look pretty dark and desperate at the time.
	There are many professionals around, but perhaps that person wants to talk with someone who has been there, travelled through the fire they are going through and come out the other side, someone who can sit with them and say, “We’re going to work through this together. I’m not just saying this; I’ve actually done it. I’ve been where you are and I’ve come out the other side. I’m going to take you by the hand and we’re going to walk through this together.” That is peer support, and we need to encourage it and see more of it.
	We need more intermediate services, because many people are terrified of going into acute care and too often the experience is not a good one. Being hospitalised is frightening. They do not want to go into acute care because they are terrified by that prospect. Let us think more about intermediate care. When things are getting on top of someone and they are feeling stressed out, that perhaps the ground is going from underneath them and that things are getting out of control, there should be a place they can go in the community, a crisis house, where they can say, “I need help, because I feel that I’m going to have some troubled times ahead.” There they can be told, “Come on in. We’re going to work together for the next couple of weeks. We’re not going to be a crutch and you aren’t going to be here indefinitely, but we will work together for the next five or 10 days or two weeks to get you back on your feet and out there again.”
	We also need uniform reporting. I want diversity of provision, because out of diversity comes innovation, but I also want to know what is going on. I want to know when we are successfully meeting the needs of those with psychosis and schizophrenia, but I also want to know when we are not, because that is when we can start doing something about it. With heart disease, cancer or stroke, we can check the league tables and know exactly what is going on, but it is much more difficult with mental health problems, particularly psychosis and schizophrenia, so we need uniform reporting. I am concerned that the Care Quality Commission is stopping its in-patient surveys in mental health wards, which I think is a mistake. I think that it is regressive and that it needs to be revisited. I hope that I can bring the focus of the House to bear on that issue.
	Patients need a voice. They need to be able to tell us what is and is not working. Most of all, we need to ensure that people have a chance of living fulfilled and complete lives and that a diagnosis of psychosis or schizophrenia is not the end of the road. They should not hear, “That’s it. Society will now turn its back on you. You’re in real trouble and you’re going to be removed.” We must have absolutely no more of that. We have an obligation to work together on mental health problems in this place and with the NHS and to say to people, “We’re going to work together to get you through this. You have a right to have a chance for a fulfilled, happy and productive life. What has gone before is not good enough, but what will come will be better.”
	I have said that I am an enthusiast and an optimist, and I am optimistic. We have the bit between our teeth, we are moving ahead and mental health is being talked about, but schizophrenia and psychosis is a difficult area for politicians and for the public, because so much misinformation and nonsense has been talked about it for so many years. It is going to be the hardest mountain to climb, but climb it we must, because we have an obligation and a duty in this country to take everyone
	with us. We must not leave people behind because they are ill but take them with us on a journey together—a journey towards wellness.
	I have spoken for far too long and I am now much more interested to hear what the Minister has to say. I conclude by saying this: I speak a lot about mental health, but I am fully aware that an army of people out there, professionals and charities, do mental health and do it extremely well. Mind and Rethink are fantastic organisations that campaign daily, hourly, by the minute to ensure that people with mental illness get a voice. As a result of their hard work, those people are getting a voice in here, and that is a good and positive thing.

Norman Lamb: I sincerely congratulate my hon. Friend the Member for Broxbourne (Mr Walker) on securing this debate on an incredibly important subject. It is good that in this House today we have debated people with learning disabilities and how they get treated by the system, and now we are debating people with schizophrenia. In the past, those two very important groups of people have often been rather neglected, and it is good that Parliament is focusing on them and how the system treats them. I pay tribute to my hon. Friend’s work as an advocate in mental health. It is very important that people speak up for those with mental health problems, and he and one or two other MPs have done us a good service by being prepared to talk about it openly. I pay great tribute to his work in this field.
	This is a timely debate. The premature mortality that my hon. Friend mentioned, the stigma, the human cost and the statistics are as well known as they are shocking. Together they add up to a compelling call for action, and that makes the recent report, “The Abandoned Illness”, very important. It sets out how things must change, how services have to be more accessible, how staff have to be fully supported, how integration of services can change lives, and, of course, how people’s mental and physical health must be treated equally. Too often in the past, mental health has been seen as the poor relation. The Government have established the principle of parity of esteem, and we now have to make it a reality. This debate is an important moment at which to consider that.
	The Government have published a mandate for the NHS Commissioning Board which sets out our key priorities for the service. The mandate goes further than ever before in setting out the priority that the Government give to mental health, and it makes it very clear that mental and physical health problems should be treated in a co-ordinated way with equal priority. We expect the NHS to demonstrate real progress on this by March 2015. We have also tasked the NHS with making progress in specific areas. Accessing care and treatment should be as easy for people with mental health conditions as for those with physical conditions, so we have asked the NHS Commissioning Board to consider new access standards, including waiting times, for mental health services. It is remarkable that in the past decade we have introduced waiting time standards for physical health—the 18-week wait—and yet in mental health there is no comparable standard. That has to change.
	The NHS outcomes framework includes four measures that relate specifically to mental health. Three of those focus particularly on patients with severe mental illness: premature mortality in people with serious mental illness; the employment of people with mental illness, which my hon. Friend spoke about very movingly; and patient experience of community mental health services. Many other outcomes that we are measuring will be as relevant to people with mental health problems as to people with physical health problems. There is no magic bullet, but I think that this will help to kick off the drive towards real parity of esteem, just as it says in “The Abandoned Illness”.
	On top of that, a lot more needs to be done to improve access to psychological therapies for people with severe mental illness. Much of the consideration of the improving access to psychological therapies project has focused on anxiety and depression, but we know that psychological therapies can also be very effective for those with a severe mental illness.
	Six local projects, backed by £1.2 million of Government funding, are working on demonstrating the benefits of IAPT in treating people with a severe mental illness or personality disorder. Over the next five months, these organisations will share what they have learned about how best to deliver evidence-based treatments. The work will include demonstrating how this group can get better access to psychological therapies, spreading good practice to other services, and providing good quality data—this has so often been missing in the past on mental health—on how services can be improved for patients.
	One of the report’s main findings was that there are far too many people with a mental illness in in-patient wards—my hon. Friend made this exact point—who do not need to be there. Furthermore, many wards are not the calm therapeutic environments that are conducive to improving patients’ well-being. Everyone in the House knows how much of a problem this is. It is not good for patients, families or the staff who work there.
	The mandate of the NHS Commissioning Board sets out plans to introduce the friends and family test for all NHS services, including those for mental health in-patients. This will allow people to feed back their experience by saying whether they would recommend a particular service to their loved ones. I should also say that I am looking into the issue of the Care Quality Commission survey. I understand that it was terminated because of concerns about its accuracy and value, but the fact is that it applies in other parts of the health service and I am concerned that mental health services lack such a survey.
	Our cross-Government mental health strategy, “No health without mental health”, also recognises the problem. Among its core objectives it lays out, first, that people who are acutely ill need to get safe, high-quality care in an appropriate environment when they need it and, secondly, that following acute illness people should be helped and supported to recover. This will mean different things to different people, but for many it will mean services working together to help people live independently, to find work and to play an active role in society. That means people moving from in-patient wards into the community, with support. This same service is integrated with early intervention, which my hon. Friend has also mentioned, and crisis teams can also support people early in their illness or during an episode of illness, so that they do not progress to needing in-patient care.
	Our implementation framework sets out specific actions that local organisations can take to make that a reality. The framework was co-produced by five leading mental health organisations, including Mind and Rethink. In addition, we are already measuring employment for this group as part of the NHS outcomes frameworks for public health and for adult social care.

Brooks Newmark: On the subject of Rethink, which does a tremendous job, will my hon. Friend join me in congratulating my constituent, Trina Whittaker, and Braintree Rethink on doing a tremendous job for those with schizophrenia and other mental illnesses?

Norman Lamb: I absolutely join my hon. Friend in applauding Trina Whittaker and the work of the local Rethink group. I met the national group last week to discuss this very subject. It does tremendous work around the country and I applaud it.
	On personal budgets, we know that people want more control over their own care. For instance, patients often do not like the drugs that they are being prescribed—they might make them overweight or have other detrimental effects. It would be far better to move away, if possible, from that paternalistic, disempowering model towards a system in which patients have much more say.
	We are already taking steps to help make that happen. The draft Care and Support Bill, published in July, places personal budgets on a legislative footing for the first time. It specifies that everyone eligible for ongoing social care, including those who are mentally ill, will get a personal budget as part of their personalised care and support plan by April 2013. On NHS services, the mandate sets out that patients with mental health conditions will be able to have an agreed personalised care plan, which they must be involved in preparing; it will not be imposed on them. Those plans will lead directly to people with mental illnesses getting the help that they want, and not being directed to a one-size-fits-all service.
	Listening to people with mental illnesses is particularly important because of the huge stigma—my hon. Friend the Member for Broxbourne talked about this—that they endure throughout almost every sphere of their lives. Stigma features heavily in the report and I welcome the clear message that it gives us: we will not tackle stigma by burying our heads in the sand. It goes without saying that schizophrenia is an immensely complex condition, and it is made even more difficult when people characterise it as simply a split personality.
	We are listening to service users who tell us of the appalling discrimination that they suffer. Many people tell us that the discrimination they face is often worse than the condition itself. That is why the Government are joining forces with Comic Relief to tackle mental health stigma. We are giving up to £16 million, alongside the £4 million that Comic Relief is providing, to Time to Change, the brilliant anti-discrimination campaign run by Mind and Rethink Mental Illness, so that it can continue its work through to March 2015. My hon. Friend and others who have spoken out about their own mental health problems are helping to address the stigma and make mental conditions more acceptable.
	I should also say a word about black and minority ethnic service users, because they are over-represented in in-patient care and often stay longer than people
	from other ethnic groups. We are discussing those long-standing issues with a range of leaders and organisations from BME communities with a view to tackling them.
	There is a clear need for organisations outside Whitehall to work much better together. The NHS, social care and other services need to work hand in hand to ensure that patients with mental health problems get effective, safe and streamlined treatment. Together, they need to identify the risks and manage them appropriately. The NHS Commissioning Board will directly commission specialised services, including secure mental health services. That is a great opportunity to ensure that there is high-standard, recovery-oriented and consistent practice across the country, with clear transitions for patients between different parts of the mental health system.
	The Department of Health funds a wide range of research on schizophrenia and other psychoses. We have awarded nearly £49 million over five years to the biomedical research centre for mental health, based at the South London and Maudsley NHS Foundation Trust. It collaborates with the Institute of Psychiatry to translate promising research into effective practice. Psychoses are a major focus of its work. The National Institute for Health Research funds a clinical research network, which allows patients across England to take part in trials and other types of clinical study. The network is currently setting up and recruiting patients to about 90 projects to study schizophrenia and psychoses. Through the “Strategy for UK Life Sciences” the Government will provide an environment and infrastructure that supports pioneering researchers and clinicians to bring innovations to market earlier and more easily, making the UK the location of choice for investment.
	The Government believe that people with schizophrenia, and indeed any severe mental illness, have a right to the care and support they need in a safe and comfortable environment where they are treated with the dignity and respect they deserve. They have as much right as anyone else to a fulfilled and productive life, free from discrimination and stigma. The coalition is making valuable changes from the centre, but this cannot be the Government’s responsibility alone. We need everyone everywhere to take what responsibility they can, including the commissioners who must purchase the care that meets people’s needs, the providers who have a duty of care to each and every individual for whom they are responsible, and the regulators who are responsible for ensuring the quality of that care. I have set out some of the recent developments at government level that will improve services for people with schizophrenia. However, I acknowledge that we are still some way from where we want to be. We must not relent in our pursuit of that.
	To that end, I am convening a round-table meeting on schizophrenia next week with leading charities, members of the Schizophrenia Commission, the Royal College of Psychiatrists and others. My hon. Friend the Member for Broxbourne is welcome to attend if he is available. The aim of the meeting is to identify the further practical actions that key players can take to improve the quality of life of people with schizophrenia and other severe mental illnesses.
	Question put and agreed to.
	House adjourned.